Whistleblower Blog Archives - Page 19 of 36

Whistleblower Blog

Offshore Tax Evasion Case: Former UBS AG’s Raoul Weil Declared a Fugitive

January 16, 2009
Michael Sullivan

Offshore tax evasion and international tax avoidance schemes have been priorities of the IRS and its IRS Whistleblower Program, as our whistleblower lawyer blog has followed repeatedly.

This week, the U.S. prosecution of the former head of UBS AG’s wealth management business, Raoul Weil, took a strange turn as he failed to surrender himself and was declared a fugitive. Weil allegedly conspired to help 17,000 American taxpayers conceal approximately $20 billion of assets in Swiss accounts, to avoid payment of U.S. taxes.

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Treasury Department Announces $14 Billion in TARP Funds to More Than 40 “Local” Banks

January 13, 2009
Michael Sullivan

Continuing the “bailout,” the Treasury Department has just announced the release of $14.77 billion in TARP funds to what it refers to as 43 “local” banks (listed below).

“Local” may be a misnomer, as the list includes $10 billion to Bank of America Corp., and more than $3 billion to American Express Company.

Let’s hope that Congress and the Treasury Department make good on the promise to protect these taxpayer funds through effective oversight, meaningful restrictions, and whistleblower protections, and that Sen. Grassley’s prediction that the qui tam whistleblower provisions of the False Claims Act will be used vigorously to redress any fraud or abuse with TARP funds comes true.

Below are today’s announced recipients of the funds:
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More IRS Whistleblower Procedures Announced by IRS Large and Midsize Business Division (LMSB)

January 13, 2009
Michael Sullivan

The IRS Large and Midsize Business Division (LMSB) has published a new memorandum on how it will handle IRS Whistleblower claims, the process for citizens to report tax fraud, tax evasion, and other tax noncompliance–and share in the government’s recovery of money. (https://www.irs.gov/pub/foia/ig/lmsb/lmsb-4-1108-052.pdf).

The LMSB Division has responsibility over corporations, subchapter S corporations, and partnerships with assets greater than $10 million. This IRS Division is divided by industry groups, including (1) Communications, Technology, and Media; (2) Financial Services; (3) Heavy Manufacturing and Transportation;
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Fraud and Abuse in Underpayment of Royalties from Oil and Gas Leases–The False Claims Act Provides A Solution

January 11, 2009
Michael Sullivan

As hundreds of billions in taxpayer funds flow to TARP bailout recipients, the government must make doubly sure to stop or minimize fraud and abuse in every federal program.

One area that cries out for attention is the underpayment of royalties owed to the government under oil and gas leases. The qui tam whistleblower provisions of the False Claims Act provide a basis for taxpayers to recover damages–and the whistleblower to receive a share of the recovery–when obligations to the government are underpaid.
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TARP Fund Restrictions Are Proposed in New Legislation

January 10, 2009
Michael Sullivan

Much criticism has flowed from how the first $350 billion in TARP “bailout” funds are being used. Thus far, the need for additional restrictions to prevent and penalize fraud and abuse of TARP money remains unmet.

In response, yesterday House Financial Services Committee Chairman Barney Frank proposed legislation establishing greater limits on use of TARP funds, among other things.

The “TARP Reform and Accountability Act of 2009” (HR 384) would require quarterly reports from recipients on their use of TARP funds, restrict the use of
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IRS on Tax Preparer Fraud: Report Illegal Tax Schemes to IRS Whistleblower Office

January 7, 2009
Michael Sullivan

With tax season approaching, the IRS has alerted the public to “tax preparer fraud” by issuing issued a “fact sheet” (at https://www.irs.gov/newsroom/article/0,,id=202123,00.html). The IRS also has attached information about reporting abusive tax schemes through the IRS Whistleblower Program, which provides rewards to whistleblowers.

Interestingly, the IRS has included descriptions of some of the tax fraud and tax evasion schemes that have caused courts to issue “more than 290 permanent injunctions against abusive tax scheme promoters and abusive return preparers since 2001.”

The summary by the IRS is reprinted below:
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With Treasury Reporting TARP Funds to More Than 200 Financial Institutions, Who–Besides Whistleblowers–Can Guard Against Fraud and Abuse?

January 6, 2009
Michael Sullivan

The Treasury Department last week issued its December 2008 report to Congress on what it has done with the “bailout” funds through the Troubled Asset Relief Program (TARP) and Capital Purchase Program (CPP). With more than 200 institutions receiving taxpayer money, an overriding question is how to prevent and redress the inevitable fraud and abuse of TARP and other taxpayer funds, through whistleblowers and other means.

Treasury reported that, as of December 31, 2008, it had invested $177.5 billion in more than 200 U.S. financial institutions. As discussed previously on the whistleblower lawyer blog, Treasury recounted its announced assistance to General Motors and GMAC, as part of the Automotive Industry Financing Program (AIFP).

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Treasury Department Announces TARP Investment in GMAC

December 29, 2008
Michael Sullivan

The TARP bailout funding continues, as the Treasury Department announced today that it will buy $5 billion in senior preferred equity with an 8% dividend from GMAC LLC.

Senator Charles Grassley has emphasized that TARP and other “bailout” funds must be protected through whistleblower protections and whistleblower laws such as the False Claims Act. The GMAC announcement today will present ample opportunities to test those premises on which Congress approved the bailout funding.

The Treasury announcement is reprinted below:
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KPMG Tax Shelter Fraud Trial Ends With Three Tax Evasion Convictions for Accountants and Lawyer

December 18, 2008
Michael Sullivan

Fraudulent tax shelters continue to be a target not only of IRS Whistleblower claims, but also of enforcement actions.

We have followed closely the KPMG tax shelter fraud case in this whistleblower lawyer blog. The trial of four defendants ended this week, with two former KPMG partners and one attorney convicted of multiple counts of tax evasion for their roles in the bogus tax shelters. Another lawyer defendant was acquitted.

Prosecutors alleged that KPMG officials offered wealthy clients illegal offshore tax shelters, and paid outside attorneys to give the bogus shelters the appearance of legitimacy. According to the government, the investments had no real risk, and generated “paper losses that allowed the accounting firm’s clients to offset income.

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Qui Tam Whistleblower Recoveries under False Claims Acts (Federal and State) in 2008

December 16, 2008
Michael Sullivan

Some recent significant recoveries under the False Claims Act–the nation’s primary tool for fighting fraud and false claims–are summarized below. This summary is part of a paper I submitted in connection with serving on the faculty (with some excellent attorneys) of the “Southeastern Health Care Fraud Institute” on December 18, 2008.

Health care attorneys will gather at the Institute to discuss developments under the qui tam provisions of the nation’s major whistleblower statute, the False Claims Act, as well as other issues relating to fraud in the health care industry.

Recent Significant False Claims Act Recoveries
(as reported by www.taf.org)

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