{"id":14527,"date":"2015-08-10T20:19:05","date_gmt":"2015-08-11T03:19:05","guid":{"rendered":"https:\/\/cjnotebook.com\/?p=14527"},"modified":"2015-08-10T20:22:05","modified_gmt":"2015-08-11T03:22:05","slug":"feds-tax-return-preparers-helped-rich-clients-hide-millions-from-irs-in-israeli-banks","status":"publish","type":"post","link":"https:\/\/cjnotebook.com\/?p=14527","title":{"rendered":"Feds:  Tax Return Preparers Helped Rich Clients Hide Millions from IRS In Israeli Banks"},"content":{"rendered":"<p><strong>WASHINGTON\u00a0<\/strong><\/p>\n<hr \/>\n<p>Two tax return preparers with offices located in California, Maryland and New York were sentenced today in Los Angeles for helping rich clients hide money by putting it in secret accounts in Israeli banks, according to officials.<\/p>\n<p><strong><a href=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2014\/04\/u.s.DISTRICT-COURT-CENTRAL-DISTRICT.png\"><img loading=\"lazy\" decoding=\"async\" class=\" size-full wp-image-2324 alignleft\" src=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2014\/04\/u.s.DISTRICT-COURT-CENTRAL-DISTRICT.png\" alt=\"u.s.DISTRICT COURT CENTRAL DISTRICT\" width=\"157\" height=\"155\" \/><\/a>David Kalai<\/strong> was sentenced to serve \u00a0three years in prison to be followed by three years of supervised release, with a condition of home confinement and ordered to pay a $286,000 fine.<\/p>\n<p><strong>Nadav Kalai<\/strong>, David Kalai\u2019s son, was sentenced to serve four years and two months in prison to be followed by three years of supervised release, and ordered to pay a $10,000 fine.<\/p>\n<p>According to the evidence, the Kalais were principals of<strong> United Revenue Service Inc.<\/strong>, a tax return preparation business with 12 offices located throughout the United States.<\/p>\n<p>David Kalai worked primarily at United Revenue Service&#8217;s former headquarters in Newport Beach, California, and later at URS\u2019 location in Costa Mesa, California.\u00a0 Nadav Kalai worked out of United Revenue Service&#8217;s headquarters in Bethesda, Maryland, as well as the locations in Newport Beach and Costa Mesa, according to officials.<\/p>\n<p>On Dec. 19, 2014, a federal jury in Los Angeles convicted the Kalais of one count of conspiracy to defraud the Internal Revenue Service.\u00a0 The Kalais were also each convicted of two counts of willfully failing to file a<strong> Report of Foreign Bank and Financial Accounts.<\/strong><\/p>\n<p>An alleged co-conspirator, <strong>David Almog<\/strong>, who is charged in the second superseding indictment, remains a fugitive.<\/p>\n<p>The Kalais advised and assisted their high net-worth clients in concealing millions of dollars of assets and income in secret foreign bank accounts and filing false federal income tax returns.<\/p>\n<p>The defendants also maintained a secret offshore account of their own at <strong>Bank Leumi<\/strong> in Luxembourg in the name of a foreign sham corporation and failed to disclose the account to the IRS or the U.S. Treasury.<\/p>\n<p>\u201cThe sentences impos<img loading=\"lazy\" decoding=\"async\" class=\" size-full wp-image-8558 alignleft\" src=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/01\/courtroom_02.jpg\" alt=\"courtroom_02\" width=\"250\" height=\"190\" srcset=\"https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/01\/courtroom_02.jpg 250w, https:\/\/cjnotebook.com\/wp-content\/uploads\/2015\/01\/courtroom_02-45x35.jpg 45w\" sizes=\"auto, (max-width: 250px) 100vw, 250px\" \/>ed today make it clear that the department is aggressively prosecuting financial professionals like the Kalais, who assist U.S. taxpayers in concealing assets offshore and evading their tax and reporting obligations,\u201d said <strong>Assistant Attorney General \u00a0Caroline Ciraolo<\/strong>.\u00a0 \u201cThe days of hiding behind numbered accounts and sham corporations are over; accountholders are coming in, accepting responsibility and cooperating against their accountants, attorneys and advisors who actively facilitated their criminal conduct.\u201d<\/p>\n<p>Evidence introduced at trial established that the co-conspirators purposefully prepared false individual income tax returns for their United Revenue Service clients that did not disclose the clients\u2019 foreign financial accounts nor report the income earned from those accounts.<\/p>\n<p>In order to conceal the clients\u2019 income, ownership and control of assets from the IRS, the co-conspirators incorporated offshore companies in Belize and elsewhere. They helped clients open secret bank accounts at the Luxembourg locations of two Israeli banks, Bank Leumi and Bank B.<\/p>\n<p><strong>Bank Leumi<\/strong> is a large financial institution headquartered in Tel-Aviv, Israel, with worldwide branches.\u00a0 Bank B is also a financial institution headquartered in Tel-Aviv with a worldwide presence.<\/p>\n<p>The sham corporations that the co-conspirators incorporated in Belize and elsewhere were used to act as named accountholders on the <strong>secret Israeli bank accounts.<\/strong><\/p>\n<p>The co-conspirators then recommended and facilitated the transfer of client funds to the secret accounts and prepared and filed tax returns that falsely reported the money sent offshore as a false investment loss or a false business expense, or entirely omitted any income earned by a client from a foreign source.<\/p>\n<p>The Kalais also failed to disclose the clients\u2019 secret accounts on tax returns that they prepared, and caused the clients to fail to file FBARs with the U.S. Treasury as required.<\/p>\n<p>Three United Revenue Service clients who testified at the Kalais\u2019 trial have plead guilty to tax felonies arising from their participation in the scheme.<\/p>\n<p>On July 1, 2013, <strong>Alexei Iazlovsky<\/strong>, a client of URS and Nadav Kalai, pleaded guilty in U.S. District Court in Los Angeles to signing and filing a false federal income tax return for tax year 2008.<\/p>\n<p>According to the evidence, Nadav Kalai facilitated the incorporation of a nominee Belize corporation for Iazlovsky, assisted Iazlovsky with setting up an offshore account in Luxembourg at one of the Israeli banks that was held in the name of the Belizean corporation and prepared false federal income tax returns, which Iazlovsky signed and filed with the IRS, that concealed the existence, assets and income of Iazlovsky\u2019s offshore account.<\/p>\n<p>On Nadav Kalai\u2019s advice, Iazlovsky diverted a total of $2.6 million in untaxed business receipts from Russian clients to his undeclared bank account in Luxembourg.<\/p>\n<p>On July 17, 2013, <strong>Moshe Handelsman<\/strong> plead guilty in U.S. District Court in San Jose, California, to signing and filing a false income tax return for the 2007 tax year.<\/p>\n<p>According to court documents and evidence introduced at trial, Handelsman was David Kalai\u2019s client since the 1990s.<\/p>\n<p>On David Kalai\u2019s advice, Handelsman used three foreign bank accounts held in the names of two different sham foreign corporations to reduce his taxes.\u00a0 The last of those accounts was held at the Tel-Aviv branch of one of the Israeli banks.\u00a0 Nadav Kalai was Handelsman\u2019s tax return preparer from 2003 through 2007.<\/p>\n<p>During those years, Handelsman sent approximately $1.47 million offshore, which was fraudulently deducted as a business expense on corporate tax returns prepared by Nadav Kalai.<\/p>\n<p>On Feb. 2, <strong>Baruch Fogel<\/strong> pleaded guilty in U.S. District Court in Los Angeles to failing to file an FBAR declaring his Bank Leumi account in Luxembourg.<\/p>\n<p>According to the evidence, David Kalai devised a scheme to reduce Fogel\u2019s income taxes in 2002 and 2003 by using a sham offshore corporation and a secret offshore bank account at Bank Leumi Luxembourg held in the name of the offshore corporation.<\/p>\n<p>David Kalai\u2019s scheme involved obtaining $8 million in loans from Bank Leumi USA and transferring that money through one or more of Fogel\u2019s U.S. businesses to Fogel\u2019s Luxembourg bank account.<\/p>\n<p>The $8 million in transfers were designed to make it appear that one or more of Fogel\u2019s U.S. businesses incurred business expenses by paying Fogel\u2019s offshore corporation.<\/p>\n<p>Once the paper trail was created, $8 million was fraudulently deducted as business expenses on Fogel\u2019s corporate tax returns prepared by URS.\u00a0 David Kalai told Fogel not to disclose his control of the foreign bank account to U.S. authorities, officials said.<\/p>\n<p>The evidence at trial also established that the Kalais each failed to file an FBAR for calendar years 2008 and 2009 with respect to a foreign account held at Bank Leumi in Luxembourg.<\/p>\n<p>According to the bank\u2019s internal records from Luxembourg, the Kalais were the true owners of the account, which was held in the name of Anack Ltd., a nominee Belizean corporation.<\/p>\n<p>In 2008 and 2009, their offshore bank account had more than $300,000 on deposit, officials said.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>WASHINGTON\u00a0 Two tax return preparers with offices located in California, Maryland and New York were sentenced today in Los Angeles for helping rich clients hide money by putting it in secret accounts&#8230;<\/p>\n","protected":false},"author":1,"featured_media":1709,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,48],"tags":[1725,1527],"class_list":["post-14527","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-main-slider","category-irs","tag-irs","tag-israeli-banks"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Feds: Tax Preparers Helped Rich Clients Hide Money from IRS<\/title>\n<meta name=\"description\" content=\"Federal officials said two tax preparers helped rich clients hide money from IRS by putting it in secret Israeli bank accounts.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cjnotebook.com\/?p=14527\" \/>\n<meta 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