Credit Suisse Fallout Continues With Two Guilty Pleas
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Two former Credit Suisse clients have pleaded guilty to hiding tens of millions from the U.S. government.
Two American businesspersons with dual citizenships and who are former clients of Credit Suisse have pleaded guilty to long-term schemes to hide money from U.S. tax authorities.
Gilda Rosenberg, of Golden Beach, Florida, a dual U.S. and Colombian citizen, has pleaded guilty to conspiring to defraud the United States by, among other things, concealing tens of millions of dollars in undeclared foreign financial accounts, filing false tax returns and evading taxes.
In Miami, businessman Dan Rotta, 78, a citizen of the U.S., Brazil and Romania and another former Credit Suisse Group AG client, has pleaded guilty to hiding millions from the U.S. Internal Revenue Service.
$90 million in assets
According to court documents and statements made in court, between 2010 and 2022 Rosenberg conspired with two family members to conceal from the IRS more than $90 million in assets and income held in undeclared bank accounts in Andorra, Israel, Panama and Switzerland.
Her family had maintained offshore accounts since the 1970s. By the late 1990s, Rosenberg, identified as an owner and an authorized signer on some of the accounts, knew that she and her family members had not disclosed their ownership of these foreign financial accounts to the U.S. government and that they had not paid any taxes on the income earned from the assets in those accounts. Starting in the early 2000s, the family consolidated their assets at accounts with Credit Suisse in Switzerland and the United Kingdom. Family members told Credit Suisse employees that they were U.S. persons seeking to hide their assets from U.S. authorities. The assets remained at Credit Suisse until 2013, when the bank closed the accounts.
Credit Suisse pleaded guilty in 2014 to helping thousands of Americans evade taxes, one of a string of scandals and investigations that have rocked the once-powerful bank – one of which is whether Credit Suisse violated its plea deal by failing to identify undeclared accounts to the IRS. (News reports said that since the bank’s 2014 plea, other U.S. clients of Credit Suisse have been charged in tax cases.)
When Credit Suisse closed their accounts, Rosenberg’s family moved their assets, which were typically titled in the names of nominee entities, to new accounts located at Bank Leumi in Israel, Union Bancaire Privée (UBP) and PKB Privat Bank SA in Switzerland and to an Andorran bank.
Rosenberg signed false account opening documents that claimed she was a Colombian resident and not a U.S. citizen. She and her relatives also did not file Reports of Foreign Bank and Financial Accounts (FBARs) disclosing their foreign financial accounts and kept filing U.S. tax returns that omitted income generated by their offshore assets. (Regulations require that U.S. citizens file an annual FBAR for any foreign accounts with an aggregate balance exceeding $10,000.)
Around 2017, Rosenberg and the family members divided the family’s assets and signed documents to make it appear that Rosenberg and a relative gifted the offshore assets to another relative after he had renounced his U.S. citizenship. Rosenberg and her relatives then tried to covertly transfer assets to Rosenberg in the United States and to conceal their ongoing tax evasion.
From 2010 through 2017, Rosenberg filed U.S. tax returns that did not report more than $5.5 million in income she earned from her assets at UBP, costing the U.S. $1,927,342 in tax revenue.
Her sentencing in this case is May 30, when she’ll face up to five years in prison, as well as a period of supervised release (the U.S. federal criminal system has no parole) and restitution and monetary penalties.
Long-term lies
According to court documents and statements in court, between 1985 and 2020, Dan Rotta hid more than $20 million in assets in dozens of secret Swiss accounts at five different Swiss banks, including UBS, Credit Suisse, Bank Bonhôte and Bank Julius Baer. The accounts were held in his own name, in the names of sham structures and, in one instance, a pseudonym.
Over the years, Rotta earned tens of millions of dollars of income from these assets that he did not report on his U.S. tax returns. He kept his accounts open in part by falsely representing that he was not a U.S. citizen, leveraging his Brazilian citizenship to claim he was a Brazilian citizen residing in Brazil. Starting in 2008, after it was reported publicly that UBS and its bankers were under investigation, Rotta closed his UBS account and moved his funds to Credit Suisse and Bank Bonhôte.
Soon after began a shell game to stay ahead of American tax authorities:
2011: The IRS obtains records related to one of Rotta’s Swiss accounts, and Rotta changes the documentation of his accounts at Suisse and Bonhôte to make it appear that his co-conspirator, a Brazilian national and resident, owns the assets in the accounts (which Rotta still controls).
The IRS soon audits Rotta, who lies that the millions he’d withdrawn from the accounts were non-taxable loans from foreign nationals. Rotta also gives the IRS fake promissory notes and false affidavits from the foreign nationals. He keeps using the foreign accounts to fund his lifestyle in the U.S. but often sends transfers from his foreign accounts through nominee accounts and attorney trust fund accounts in the United States.
Unconvinced, the IRS assesses millions of dollars of additional taxes as well as penalties and interest. Rotta counter-files a false petition in U.S. Tax Court, denying having any foreign accounts and attaching fictitious loan documents. The nominee account owners also travel to the U.S. to retell the false loan story to IRS attorneys.
2017: After Rotta presents evidence that the purported loans have been repaid, the IRS reverses the deficiencies and agrees that Rotta owes no additional tax. The “loan repayments” are fake, the money simply funneled back into accounts that he soon controls. He also has his U.S.-based attorneys create sham trust structures to transfer his assets to the U.S. without alerting the IRS.
2019: Rotta becomes aware that the IRS would receive additional account records from Switzerland that contradicted the false claims he previously made. He applies to participate in the IRS voluntary disclosure practice but lies on his submission, including falsely claiming that the assets in the Swiss accounts mostly belonged to others and that any funds provided to Rotta were non-taxable gifts. He also falsely claims that the nominee account owner gifted Rotta money because the nominee had no children to benefit from the funds.
Rotta will be sentenced on June 4, when he will face a maximum of five years in prison.
The collapse of a huge international financial institution means more than a few headlines of criminal cases: It’s also a warning to other clients and all holders of international accounts that prosecutors watch cross-border tax matters more closely than ever.
Your tax specialist needs to stay on top of this and many other issues of wealth, foreign income and tax enforcement. If we can help, please let us know.
About the Author
Alicea Castellanos is the CEO and Founder of Global Taxes LLC. Alicea provides personalized U.S. tax advisory and compliance services to high-net-worth families and their advisors.
Alicea has more than 20 years of experience. Prior to forming Global Taxes, Alicea founded and oversaw operations at a boutique tax firm, worked at a prestigious global law firm and CPA firm.
Alicea specializes in U.S. tax planning and compliance for non-U.S. families with global wealth and asset protection structures which include non-U.S. trusts, estates and foundations that have a U.S. connection.
Alicea also specializes in foreign investment in U.S. real estate property, and other U.S. assets, pre-immigration tax planning, U.S. expatriation matters, U.S. persons in receipt of foreign gifts and inheritances, foreign accounts and assets compliance, offshore voluntary disclosures/tax amnesties, FATCA registration, and foreign companies wanting to do business in the U.S.
Alicea is fluent in Spanish and has a working knowledge of Portuguese.
Alicea is an active member of the Society of Trusts & Estates Practitioners (STEP), the New York State Society of Certified Public Accountants (NYSSCPAs), the American Institute of Certified Public Accountants (AICPA), the International Fiscal Association (IFA), a member of Clarkson Hyde Global, a world-wide association of accountants, auditors, tax specialists and business advisors and the Global Referral Network (GRN).
Distinctly, in 2020, Alicea was awarded with a prestigious NYSSCPA Forty Under 40 Award. She was selected as someone that has notable skills and is visibly making a difference in the accounting profession.
In 2021 and 2022, Alicea was the Gold and Silver Winner, respectively, of Citywealth’s Powerwomen Awards in the category USA – Woman of the Year – Business Growth (Boutique). In 2023, she continued her winning streak by receiving the Gold award for Company of the Year Female Leadership (Boutique) and the Silver award for Accountancy Firm of the Year at the Magic Circle Awards. Furthermore, Alicea has consistently secured her position in the Global Elite Directory for four consecutive years, being recognized as a Private Client Global Elite Advisor and is currently listed for 2024 as a Non-Legal Adviser. This exclusive directory annually highlights the world’s elite lawyers and outstanding wealth advisors serving ultra-high net-worth clients.
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