Alexandria, Virginia, USA (GenevaLunch) - Details are emerging of the case of Dr Andrew Silva, who pleaded guilty 16 February in US District Court in Virginia to “conspiring to impede the United States” and to making false statements. Silva inherited $250,000 from him mother in 1997. The money, never declared to the US tax authorities, the IRS, was in a British-owned bank in Switzerland. The money grew to $268,000 by the time he tried to take the money out in 2009 when the bank said it was closing his account, a time when a number of banks in Switzerland began to close accounts held by US citizens both outside and in Switzerland. to avoid problems with US authorities.
The US Justice Department Tuesday issued a press release on his case, noting that Silva, a nose and throat specialist and surgeon, could face up to 10 years in prison and a maximum fine of $500,000. He was released on his own recognizance.
“We are capable of thwarting offshore banking schemes because of the increased cooperation among ICE, Postal Service, and the IRS,” says Neil MacBride, US Attorney for the Eastern District of Virginia says in the Justice Department release. “The tax charges in this case came to light because agents caught Mr Silva structuring cash to avoid reporting requirements, and that kind of coordination is making it possible for us to discover Americans who conceal their wealth overseas and make them pay for their actions.” Structuring cash is a term that describes bundling a large amount into several smaller ones, all under $10,000, to slip them into the US to avoid detection or without having to declare the money to customs authorities.
The Justice Department points out that “United States law prohibits individuals from structuring mailings of US currency into the United States in amounts less than $10,000 if the purpose of the structuring was to evade the requirement to file a CMIR.” The CMIR form’s longer name is: FinCen Form 105, Report of International Transportation of Currency or Monetary Instruments, and it must be filed with the US Bureau of Customs and Border Protection.
The government’s description of how Silva tried to get the money out of Switzerland:
The account was held in the name of a sham Liechtenstein trust. In 1999, Silva met with an attorney who managed the account in Zurich, Switzerland. The Zurich attorney instructed Silva to keep the account “hush,” to not keep any records relating to the account, and to send coded letters if he wished to meet with the attorney. Further, the Zurich attorney advised Silva that if he transported or mailed less than $10,000 in US currency back to the United States, he would not have to declare the funds to the US government upon re-entry to the United States.
According to court documents, in September 2009, Silva was informed that the international bank was closing his undeclared Swiss account and that he had until the end of the year to travel to Switzerland to withdraw all funds. He made two trips to Zurich in October and November 2009 and met with the Zurich attorney at his office and a Swiss banker at the private wealth office of the international bank. The Zurich attorney and the Swiss banker refused to wire the money to the United States as it would leave a trail for US law enforcement. Instead, they provided him with $235,000 in US currency. Of that total, Silva received $200,000 in two individually wrapped “bricks” of $100,000 of sequentially numbered, new $100 bills.
According to court documents, with the assistance of the Zurich attorney, Silva mailed 26 packages containing over $200,000 in US currency from Switzerland to the United States to himself and another person.
The government notes that Silva filed false tax forms by failing to declare that he had an interest in a foreign bank account from 1997-2008 and by failing to declare the income on his US tax forms. He also did not file an Fbar form “reporting his interest in his undeclared Swiss account that had an aggregate value of more than $10,000 at any time during a particular year.” (Ed. note: GenevaLunch in 2009 ran a series of articles on what has changed for US citizens living overseas, including information on the often poorly understood Fbar requirement)
The name of the bank remains unconfirmed, with Bloomberg citing a source as saying it is UK-based HSBC and several major US media picking up this information without confirming it themselves. HSBC has not commented on the accusations and the Justice Department does not name the bank, saying only that it was a “Zurich, Switzerland, branch of one of the world’s largest international banks. The bank is headquartered in England and also has offices in Zurich, Geneva, and the Eastern District of Virginia.”