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The U.S. Department of Justice has reached a plea deal with a Boston man accused of concealing his investments in Swiss banking company UBS A.G., and tax lawyers expect that plenty more similar cases are in the pipeline. According to court papers, Peter Schober worked with UBS to set up a Panamanian corporation with no operations called Small Guard Foundation in 2000. Schober deposited more than $1 million in the account for a five-year period that started in 2002. This enabled him to avoid paying about $77,870 in taxes. Schober pleaded guilty to the charges on Nov. 23. He could face five years in prison, three years of supervised release and a $250,000 fine. His sentencing is slated for Feb. 9, 2011. Schober released a statement through his attorney, Terry Philip Segal, a Boston special counsel to Philadelphia-based Duane Morris. “I take full responsibility for failing to disclose to the US government the existence of my foreign bank account,” stated Schober. “I am fully committed to paying all penalties taxes and interest associated with this failure to disclose, and look forward to putting this matter behind me.” “This investigation is a result of a nationwide initiative to root out and prosecute offshore financial schemes,” said U.S. Attorney for the District of Massachusetts Carmen Ortiz, in a written statement. The government has ramped up efforts to collect taxes on money stowed in offshore accounts during the past few years. In June 2008, DOJ filed a “John Doe” case in Miami federal court, which allowed the Internal Revenue Service to serve summonses on UBS about U.S. taxpayers’ offshore accounts. In February 2009, DOJ entered into a deferred prosecution agreement with UBS. In exchange for the company’s cooperation, DOJ delayed charging UBS with conspiring with U.S. taxpayers to commit fraud against the U.S. government. UBS paid $780 million in fines, penalties, and restitution, and it agreed to turn over names as part of the deal, which stemmed from a Southern District of Florida case, U.S. v. UBS A.G. The total included $200 million to settle with the U.S. Securities and Exchange Commission in a case the agency filed in the U.S. District Court for the District of Columbia, SEC v. UBS A.G. On Nov. 16 of this year, the IRS announced that it ultimately expects to get information about roughly 7,500 UBS accounts from several sources, including the deferred prosecution agreement. Other disclosures came from an August 2009 agreement among the United States, UBS and Switzerland, which stemmed from the 2008 “John Doe” case. The IRS also started its own voluntary disclosure program in March 2009 for violators of offshore tax laws. All told, the IRS has received more than 18,000 voluntary disclosures from offshore-account holders with accounts at various companies, including 15,000 before the program ended in October 2009. There’s going to be an increasing number of enforcement actions brought against U.S. taxpayers using offshore accounts to allegedly hide taxable money, said Paul McKenney, a federal tax law partner in the Novi, Mich., office of Grand Rapids-based Varnum, Riddering, Schmidt & Howlett. The IRS has no shortage of leads, and both political parties favor enforcement of offshore tax evasion, McKenney said. “There’s been no diminution [in enforcement] since the [start of the] Obama administration,” McKenney said. “The one thing the two parties agree on is tax enforcement.” Sheri Qualters can be contacted at [email protected].

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