“(N)o one is too old, or too rich, or too poor, or too sympathetic to escape criminal prosecution” for evading the duty to pay taxes. This quote from Bryan Skarlatos, a New York based lawyer, reflects a lesson that is being learned the hard way by some. Mary E. Curran, for example, is a seventy eight year old charity worker who was recently convicted of evading $668,000 in taxes on an undisclosed bank account left to her by her late husband.
Ms. Curran, however, is hardly the only one being scrutinized by government accountants, however. Here’s a look at some big cases that have developed recently.
No, this isn’t the name of a lost city made from gold. Eldorado is a Russia based company that sells home appliances, electronics, and other popular items. Owned by Igor Yakolev, Eldorado operates more than eleven hundred stores within Russia’s boundaries, as well as six “superstores” under the ETO brand, and forty stores in Kazakhstan. The company generates an estimated USD $6 billion yearly. Unfortunately, they are currently under investigation for evading taxes on some of that income.
Authorities claim that during the 2004 2005 time period, Eldorado upper management actively avoided paying over USD $300 million in import taxes. It is alleged that Alex Shifrin, Eldorado’s General Director at the time, created a series of false companies through which goods were imported. These companies would exist for a few days, but as soon as product entered the country they would dissolve before paying the import tax.
Tax authorities say that the company owes in excess of USD $300 million in back taxes. Lawyers for Eldorado claim that the actual number is only half of that amount. Should the higher number stand at the end of the investigation, Mr. Yakoley says he will be forced to sell part of his company in order to meet other financial obligations.
U.S. Crackdown On Undisclosed Accounts
Four years ago, the United States and Switzerland struck a deal that forced Swiss bank UBS to hand over the names of U.S. persons owning overseas accounts. This has so far resulted in over fifty criminal cases being won by the U.S. and collected $5.5 billion in taxes owed, with an estimated hundred more investigations that are currently ongoing. The deal didn’t only affect UBS. The IRS is also investigating a number of smaller Swiss banks that do not have physical locations in the United States, but whose accounts in the States were serviced by UBS.
In order to save money on investigations and prosecution, the U.S. is currently operating it’s third tax amnesty program since 2009. While those approved for amnesty typically have to pay all of their taxes owed as well as very high penalties, they avoid the possibility of jail time. So far, these amnesty programs have recovered another $5.5 billion with another $5 billion due to be paid.
The Zumba Lady
In the small Maine town of Kennebunk, a much smaller, but very interesting, tax evasion case is unfolding.
Alexis Wright has made international news for allegedly running a one woman prostitution business out of her Zumba studio. In addition to prostitution, state prosecutors say that Wright owes tax money on over $150,000 generated through her activities. While this sounds like a very small, almost laughable case in the grand scheme, it has attracted international attention due to Wright’s alleged meticulous record keeping. Former President George H.W. Bush also owns a compound in the nearby town of Kennebunkport.