Manhattan US Attorney Announces Agreement with Bank of Bermuda to Solve Criminal Tax Investigation | USAO-SDNY


Audrey Strauss, United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Assistant Attorney General of the Tax Division of the Department of Justice, and James C. Lee, Chief of the Internal Revenue Service, Criminal Investigation (“IRS -CI”), today announced that Bank of NT Butterfield & Son Limited (“BUTTERFIELD”) has entered into a No Prosecution Agreement (“NPA”) with the United States Attorney’s Office and has accepted to pay $ 5.6 million to the United States for assisting United States taxpayer-clients in opening and maintaining undeclared foreign bank accounts from 2001 to 2013. The NPA was based on the extraordinary cooperation of BUTTERFIELD , including its efforts to provide 386 client files for non-compliant US taxpayers, and provides that BUTTERFIELD will not be criminally prosecuted. The NPA demands that BUTTERFIELD waive US $ 4.896 million, which represents certain charges that she earned by helping her U.S. taxpayer clients open and maintain these undeclared accounts, and pay $ 704,000 in restitution to the IRS, representing the approximate unpaid taxes resulting from tax evasion by BUTTERFIELD’s U.S. taxpayer clients .

Manhattan US attorney Audrey Strauss said, “Butterfield admits to helping clients conceal ownership of their foreign bank accounts to avoid their US tax obligations. Butterfield created dummy entities and helped US clients channel money between accounts based in the US and the Cayman Islands. The resolution of this matter through a non-prosecution agreement, as well as forfeiture and return, reflects Butterfield’s cooperation in our investigation and demonstrates that cooperation, including assistance in providing customer records of US taxpayers, has tangible benefits. We will continue to prosecute financial services companies around the world who help their clients evade US taxes. “

Acting Assistant Deputy Attorney General Stuart M. Goldberg said: “As part of the resolution announced today, Butterfield has facilitated the production of approximately 386 unredacted client files. Taxpayers who plan to hide money abroad and those who would facilitate their fraud should take note – nothing remains hidden forever.

IRS-CI Chief James C. Lee said: “Following the successful resolution of this investigation, Butterfield agreed to turn over the account files relating to U.S. taxpayers who held undeclared assets to the ‘foreigner. This agreement marks another important step in the fight against tax evasion abroad. Anyone who hides money or assets abroad with the intention of committing tax evasion will be found and prosecuted. It is not a question of “if”, it is a question of “when”.

As part of the NPA, BUTTERFIELD admitted various facts regarding its misconduct and the corrective actions it took to put an end to that conduct. Specifically, BUTTERFIELD admitted that she knew or should have known that some U.S. taxpayers were using their BUTTERFIELD accounts to evade their U.S. tax obligations, in violation of U.S. law. BUTTERFIELD admitted to helping some U.S. taxpayer-clients withhold beneficial ownership of undeclared assets held in foreign bank accounts from the IRS for: business purpose – even though Bank staff knew, or should have known, that the entities were used to conceal the identity of the real account holders; and (ii) opening accounts and facilitating the transfer of funds for US taxpaying clients despite obvious red flags that US clients were using the accounts to hold undeclared assets or to commit tax evasion.

The NPA acknowledges that in 2013, BUTTERFIELD implemented a series of corrective measures to stop helping U.S. taxpayers evade federal income tax. The NPA further acknowledges BUTTERFIELD’s cooperation, including its efforts to facilitate the production of approximately 386 client files for non-compliant US taxpayers, which included the identities of those US taxpayers.

Under the NPA, BUTTERFIELD agreed to confiscate $ 4.896 million from the United States, representing gross revenues from the services it provided to U.S. taxpayers with undeclared foreign bank accounts from 2001 to 2013. As part of this forfeiture, BUTTERFIELD has agreed not to challenge a civil forfeiture action brought by the United States.

The NPA requires BUTTERFIELD to continue to cooperate with the United States for at least three years from the date of the agreement. In the event that BUTTERFIELD violates the NPA, the US attorney’s office can prosecute BUTTERFIELD.

Ms. Strauss thanked the IRS for its outstanding work in investigating this case and thanked the Justice Department’s tax division for its assistance in the investigation.

This investigation is overseen by the Office’s Complex Fraud and Cybercrime Unit. Assistant US Attorney Kiersten A. Fletcher is in charge of the case.

Leave A Reply

Your email address will not be published.