{"id":1026,"date":"2014-04-08T08:28:05","date_gmt":"2014-04-08T13:28:05","guid":{"rendered":"http:\/\/www.patellawoffices.com\/blog\/?p=1026"},"modified":"2014-04-08T08:28:05","modified_gmt":"2014-04-08T13:28:05","slug":"cayman-islands-advisors-arrest-suggest-u-s-government-receiving-more-information-about-offshore-accounts","status":"publish","type":"post","link":"https:\/\/patellawoffices.com\/blog\/planning-for-tax-minimization\/cayman-islands-advisors-arrest-suggest-u-s-government-receiving-more-information-about-offshore-accounts\/","title":{"rendered":"Cayman Islands Advisors Arrest Suggest U.S. Government Receiving More Information About Offshore Accounts"},"content":{"rendered":"

According to a DOJ Tax Press Release,\u00a0here<\/a>, the IRS has arrested a U.S. Citizen and two Canadian citizens who offered enabler services to U.S. taxpayers. \u00a0They were caught in a classic IRS sting operation. \u00a0Here is a summary of the facts:<\/p>\n

Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were indicted for conspiracy to launder monetary instruments, the Department of Justice and Internal Revenue Service (IRS) announced today. \u00a0The indictment alleges that Vandyk, St-Cyr and Poulin conspired to conceal and disguise the nature, location, source, ownership and control of property believed to be the proceeds of bank fraud. \u00a0The Caribbean-based defendants allegedly assisted undercover law enforcement agents, posing as U.S. clients, in laundering purported criminal proceeds through an offshore structure designed to conceal the true identity of the proceeds\u2019 owners. \u00a0Vandyk and St-Cyr invested the laundered funds on the clients\u2019 behalf and represented the funds would not be reported to the U.S. government.<\/p><\/blockquote>\n

In addition to the conspiracy charge, Vandyk, St-Cyr and Poulin were each charged with two counts of money laundering.<\/p><\/blockquote>\n

According to the indictment, Vandyk and St-Cyr lived in the Cayman Islands and worked for an investment firm based in the Cayman Islands. \u00a0St-Cyr was the founder and head of the investment firm, whose clientele included numerous U.S. citizens. \u00a0Poulin, an attorney at a law firm based in Turks and Caicos, worked and resided in Canada and in the Turks and Caicos. \u00a0His clientele also included numerous U.S. citizens. \u00a0\u00a0<\/span><\/p><\/blockquote>\n

\u00a0According to the indictment, Vandyk, St-Cyr and Poulin solicited U.S. citizens to use their services to hide assets from the U.S. government. \u00a0Vandyk and St-Cyr directed the undercover agents posing as U.S. clients to create offshore foundations with the assistance of Poulin and others because they and the investment firm did not want to appear to deal with U.S. clients. \u00a0Vandyk and St-Cyr used the offshore entities to move money into the Cayman Islands and used foreign attorneys as intermediaries for such transactions.<\/p><\/blockquote>\n

\u00a0According to the indictment, Poulin established an offshore foundation for the undercover agents posing as U.S. clients and served as a nominal board member in lieu of the clients. \u00a0Poulin transferred wire payments from the offshore foundations to the Cayman Islands, where Vandyk and St-Cyr invested those funds outside the United States in the name of the offshore foundation. \u00a0The investment firm represented that it would neither disclose the investments or any investment gains to the U.S. government, nor would it provide monthly statements or other investment statements to the clients. \u00a0Clients were able to monitor their investments online through the use of anonymous, numeric passcodes. \u00a0Upon request from the U.S. client, Vandyk and St-Cyr would liquidate investments and transfer money, through Poulin, back to the United States. \u00a0According to Vandyk and St-Cyr, the investment firm would charge clients higher fees to launder criminal proceeds than to assist them in tax evasion.<\/p><\/blockquote>\n

This past week, Assistant Attorney General Kathryn Keneally of the department\u2019s Tax Division\u00a0said the sting should serve as a warning about offshore accounts. \u00a0\u201cThe Cayman case illustrates that we have ways of getting information that people don\u2019t know about,\u201d\u00a0Assistant Attorney General Kathryn Keneally of the department\u2019s Tax Division said at a news conference in New York.\u00a0\u201cThe days of waiting for a warning sign, such as a letter from a bank, are over.\u201d \u00a0Keneally said that the government receives account information from many sources, including whistleblowers hoping for monetary rewards.\u00a0She declined to comment on whether U.S. officials have the names of Americans who hold accounts in the Caymans or elsewhere in the Caribbean as a result of this probe.<\/p>\n

Taxpayers are ineligible to participate in the IRS\u2019s offshore voluntary disclosure program (OVDP) for undeclared offshore accounts if U.S. authorities already have their names. The program imposes steep penalties but offers protection against criminal prosecution. \u00a0It is believed that\u00a0U.S. authorities do have names of account holders in the Caymans.<\/p>\n

In March of last year, the indictment says, three undercover IRS agents met with St-Cyr and VanDyk in Miami. One of the agents represented himself as a U.S. citizen who wanted to launder $2 million. \u00a0<\/span>To show how the scheme worked, Poulin, VanDyk and St-Cyr arranged several transfers of $200,000, the indictment alleges.\u00a0In December, the funds were wired from a Virginia account to an account at Poulin\u2019s law firm in the Turks and Caicos, according to the indictment. The $200,000 was then moved to an account in the Cayman Islands, and most of it was returned to the U.S. in February.\u00a0Poulin allegedly told the IRS agents that most of his clients were Canadian or American. The entire $2 million was intended to be concealed, in part by using a foundation named Zero Exposure in the Turks and Caicos.<\/p>\n

St-Cyr and VanDyk allegedly said that they charged clients more to launder criminal proceeds than to assist in tax evasion, according to the indictment. They also said a foundation was preferred for laundering criminal proceeds, while a trust was sufficient to conceal tax evasion.<\/p>\n","protected":false},"excerpt":{"rendered":"

According to a DOJ Tax Press Release,\u00a0here, the IRS has arrested a U.S. Citizen and two Canadian citizens who offered enabler services to U.S. taxpayers. \u00a0They were caught in a classic IRS sting operation. \u00a0Here is a summary of the facts: Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[23,24,68,27],"class_list":["post-1026","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization","tag-fbar","tag-foreign-account","tag-ovdp","tag-voluntary-disclosure"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1026","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=1026"}],"version-history":[{"count":0,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1026\/revisions"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=1026"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=1026"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=1026"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}