Hiding assets to avoid paying taxes can come with a hefty price. A former University of Rochester professor learned that.
He already paid fines totaling more than $100 million for failing to disclose income that he was keeping in Swiss bank accounts. Now he's been sentenced to federal prison for seven months. The 71-year-old could have gotten a five-year sentence.
According to federal prosecutors, the former business professor failed to disclose over $220 million to the Internal Revenue Service. He pleaded guilty last November to filing a false expatriation statement and for conspiracy to defraud the IRS.
The man taught at UR for over three decades. In 1995 he began investing in small start-up companies. While most of these companies didn't succeed, one reportedly was very profitable. Prosecutors say he began putting money in the Swiss bank in 2000 and continued until 2015, when IRS agents nabbed him.
Prosecutors say that the former professor, who has severed all ties with UR and resigned as professor emeritus, considerably underreported his income from sales of his company stock. He also failed to file or filed false Reports of Foreign Bank and Financial Accounts for several years.
When they entered his guilty plea last year, his attorneys said that their client "deeply regrets what he did and accepts full responsibility for his actions." He's scheduled to report to prison in May.
Most tax fraud cases are not this complex nor do they generally involve hundreds of millions of dollars. Sometimes, people have no intention of defrauding the government. They may have received bad advice or been negligent. Whatever the case, tax fraud is something that prosecutors at all levels take very seriously. If you're facing these charges, it's essential to have experienced legal guidance.
Source: Democrat and Chronicle, "Ex-UR professor, fined $100M, sentenced to 7 months in tax case," James Goodman, Feb. 10, 2017