Zurich’s Oldest Private Bank Admits To Helping U.S. Taxpayers Hide Offshore Accounts From IRS

 

Rahn+Bodmer Enters into Deferred Prosecution Agreement for Criminal Misconduct; Agrees to Pay $22 Million

 Audrey Strauss, United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Deputy Assistant Attorney General for the Department of Justice’s Tax Division, and James C. Lee, Chief of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), announced the filing of a criminal Information against RAHN+BODMER CO. (“R+B”), a financial institution located in Zurich, Switzerland.  The Information charges R+B with one count of conspiring to help U.S. accountholders evade their U.S. tax obligations, file false federal tax returns, and otherwise defraud the Internal Revenue Service (“IRS”) by hiding hundreds of millions of dollars in offshore bank accounts at R+B.

Ms. Strauss, Mr. Goldberg, and Mr. Lee also announced a deferred prosecution agreement with R+B (the “Agreement”), under which R+B admits to its unlawful conduct in assisting U.S. accountholders in violating their legal duties.  R+B’s admissions are contained in a detailed Statement of Facts attached to the Agreement.  The Agreement requires R+B to provide ongoing assistance to the Department of Justice and to pay a total of $22 million in restitution, forfeiture, and penalties.  If R+B abides by all of the terms of the Agreement, the Government will defer prosecution on the Information for three years and then seek to dismiss the charge.

Manhattan U.S. Attorney Audrey Strauss said:  “As Rahn+Bodmer now admits, it aided U.S. taxpayers in evading their tax responsibilities to the tune of more than $16 million.  This venerated banking institution knowingly offered banking services that assisted its U.S. customers in evading their tax obligations, and affirmatively schemed to conceal from the IRS the assets and income of U.S. accountholders.  Now Rahn+Bodmer will pay $22 million and commit to helping the Justice Department uncover tax evasion by U.S. customers.”

Acting Deputy Assistant Attorney General Stuart M. Goldberg said:  “Under today’s resolution, Rahm+Bodmer is paying $22 million for helping U.S. accountholders evade their taxes, and  has agreed to fully cooperate with investigations into those taxpayers.  With the April 15 tax filing date fast approaching, there is a clear message for those intending not to pay their fair share – nothing remains hidden forever.”

IRS-CI Chief James C. Lee said:  “Through a years-long scheme, the R+B bank hid the assets of U.S. accountholders to shield them from their tax obligations.  Today’s admission and agreement provide a clear path to recovery of funds owed to the U.S. government, and sends a strong signal that offshore accounts are not beyond the reach of special agents with IRS CI.”

According to the Agreement, the accompanying Statement of Facts, and other documents filed today in Manhattan federal court:

From at least in or about 2004 and continuing until at least in or about 2012, R+B conspired with certain of its U.S. accountholders and others to defraud the United States with respect to taxes, file false federal tax returns, and commit tax evasion.  R+B’s bankers assisted U.S. accountholders in concealing their ownership and control of assets and funds held in undeclared R+B accounts, which enabled those U.S. accountholders to evade their U.S. tax obligations.  R+B admitted to holding undeclared accounts on behalf of approximately 340 U.S. taxpayers, who collectively evaded approximately $16.4 million in U.S. taxes between in or about 2004 and in or about 2012.  The assets under management that R+B held for undeclared U.S. accountholders increased from approximately $391 million in 2004 to approximately $550 million in 2007, its peak year for undeclared assets under management.

In furtherance of the scheme to help U.S. taxpayers hide assets from the IRS and evade taxes, R+B undertook the following actions, among others:

• R+B opened “numbered” or “pseudonym” accounts for U.S. accountholders in order to reduce the risk that U.S. tax authorities would learn their identities.
   
• R+B opened and maintained accounts for U.S. accountholders in the names of non-U.S. corporations, foundations, trusts, or other legal entities, thereby helping U.S. taxpayers conceal their beneficial ownership of the accounts.
   
• R+B agreed to hold bank statements and other account-related mail in Switzerland, rather than send them to the U.S. accountholders in the United States, which helped ensure that documents reflecting the existence of the accounts remained outside the United States and beyond the reach of U.S. tax authorities.
   
• After Liechtenstein and the United States signed a Tax Information Exchange Treaty in December 2008, R+B transferred the undeclared assets of certain U.S. taxpayers from accounts held in the names of sham foundations organized under the laws of Liechtenstein to new accounts held in the names of new sham foundations organized under the laws of Panama, in an effort to further conceal the accounts from U.S. tax authorities.
   
• R+B allowed U.S. accountholders and third-party asset managers to make withdrawals by check from undeclared accounts in amounts of less than $10,000, in an apparent attempt to conceal transactions from U.S. authorities.
   
• On occasion, R+B opened accounts for U.S. taxpayers who were exiting UBS AG and other Swiss banks, and allowed these U.S. taxpayers to continue to conceal their undeclared assets at R+B.  R+B additionally opened “escrow” accounts on behalf of a Swiss attorney to facilitate the transfer of undeclared assets of U.S. accountholders that had been converted to gold and other precious metals held in a vault at UBS.
   
• R+B helped U.S. accountholders to repatriate funds to the United States in a manner designed to ensure that U.S. tax authorities did not discover the undeclared accounts, including by transferring the funds of one U.S. accountholder in increments of approximately $100,000 to another Swiss bank before the U.S. accountholder routed the funds to a diamond dealer in Manhattan, where the U.S. accountholder ultimately received them.
   
• R+B, through its bankers, made regular visits to the United States to solicit, open, and service undeclared accounts of U.S taxpayers.

Under today’s resolution, R+B is required to cooperate fully with the Department of Justice and affirmatively disclose new information it may later uncover regarding U.S.-related accounts.  R+B is also required to disclose information consistent with the Department’s Swiss Bank Program relating to accounts closed between January 1, 2009, and December 31, 2019.   

As part of the resolution, R+B will pay a total of $22 million, which has three parts.  First, R+B has agreed to pay $4.9 million in restitution to the IRS, which represents the estimated unpaid taxes resulting from R+B’s participation in the conspiracy.  Second, R+B has agreed to forfeit $9.7 million to the United States, which represents the approximate gross fees that R+B earned on its undeclared U.S.-related accounts between 2004 and 2012.  Finally, R+B has agreed to pay a penalty of $7.4 million.  The penalty takes into consideration that R+B conducted a thorough internal investigation and provided a substantial volume of documents to the Department, as well as implemented remedial measures to protect against the use of its services for tax evasion in the future.

Ms. Strauss and Mr. Goldberg praised the outstanding work of IRS-CI.  Ms. Strauss also thanked the Department of Justice’s Tax Division for their partnership on this case.

Attorney General James Responds to Legislature’s Action to Investigate Sexual Harassment Allegations Against Governor Cuomo

 

 New York Attorney General Letitia James today released the following statement confirming that the independent investigation her office is overseeing into allegations of sexual harassment against Governor Andrew Cuomo will continue regardless of today’s actions by the New York state legislature:

“Today’s action by the New York state legislature will have no bearing on our independent investigation into these allegations against Governor Cuomo. Our investigation will continue.”

Earlier this week, Attorney General James announced the appointment of former Acting U.S. Attorney for the Southern District of New York Joon H. Kim and employment discrimination attorney Anne L. Clark as the two attorneys leading the independent investigation into Governor Cuomo.

Assemblymember Nathalia Fernandez - Women HERstory Month Events

 

Join me at the following Women's HERstory Month events: Small Business Pop-Up Date: Saturday March 13th  Time: 11:00am Location: Maestros Catering Hall, 1703 Bronxdale Ave   NYPL Family Storytime Date: Wedsneday March 24th  Time: 11:00am - 11:30am  Location: Register Here   M/WBE Certification Webinar Date: Wedsneday March 24th  Time: 6:00pm - 7:30pm  Location: Register Here Sincerely,  Assemblywoman Nathalia Fernandez

Governor Cuomo Announces More than 6 Million Total Doses Administered Across New York State

 

More than 20% of New Yorkers Have Received a First Dose 

10.4% of New Yorkers Fully Vaccinated

More than 1 Million Doses Administered at New York State-Run Mass Vaccination Sites   

Vaccine Dashboard Will Update Daily to Provide Updates on the State's Vaccine Program; Go to ny.gov/vaccinetracker 

 Governor Andrew M. Cuomo today announced more than 6 million total COVID vaccine doses have been administered across New York State. More than 20 percent of New Yorkers have received a first dose, and 10.4 percent of New Yorkers are fully vaccinated. 144,946 doses have been administered across New York's vast distribution network in the last 24 hours, and more than 1.12 million doses have been administered over the past seven days. Across New York State's network of mass vaccination sites, more than 1 million doses have been administered to date. The week 13 allocation from the federal government is in the process of being delivered to providers for administration.      

"The vaccine is the weapon that will win the war, and with more and more New Yorkers getting vaccinated every day, we are gradually weakening the beast," Governor Cuomo said. "Our partners in the White House have committed to delivering us a steady supply, and our high-capacity distribution network enables us to get over a million shots administered on a weekly basis. Even as we reach new milestones, we are still in a footrace to make sure the vaccination rate remains ahead of the infection rate, but we have a successful formula in place and we will continue working around the clock until New York becomes the first COVID-free state in the nation."  

New York's vast distribution network and large population of eligible individuals still far exceed the supply coming from the federal government. Due to limited supply, New Yorkers are encouraged to remain patient and are advised not to show up at vaccination sites without an appointment.          

The 'Am I Eligible' screening tool has been updated for individuals with comorbidities and underlying conditions with new appointments released on a rolling basis over the next weeks. New Yorkers can use the following to show they are eligible:    

·     Doctor's letter, or

·     Medical information evidencing comorbidity, or

·     Signed certification   

Vaccination program numbers below are for doses distributed and delivered to New York for the state's vaccination program, and do not include those reserved for the federal government's Long Term Care Facility program. A breakdown of the data based on numbers reported to New York State as of 11AM today is as follows.        

STATEWIDE BREAKDOWN

Total doses administered - 6,086,018 

Total doses administered over past 24 hours - 144,946 

Total doses administered over past 7 days - 1,126,783 

Percent of New Yorkers with at least one vaccine dose - 20.4%

Percent of New Yorkers with completed vaccine series - 10.4%   

Governor Cuomo Updates New Yorkers on State's Progress During COVID-19 Pandemic March 11, 2021

 

Hospitalizations Drop to 4,735—Lowest Since December 6

ICU Patients Drop to 955—Lowest Since December 8; 665 Intubated

Statewide Positivity Drops to 2.77%—Lowest Since November 21

80 COVID-19 Deaths in New York State Yesterday

 Governor Andrew M. Cuomo today updated New Yorkers on the state's progress during the ongoing COVID-19 pandemic. Hospitalizations dropped to 4,735, the lowest since December 6. The number of patients in ICUs dropped to 955, the lowest since December 8. Yesterday's positivity rate dropped to 2.77 percent, the lowest since November 21. 

"COVID-19 remains a serious issue in New Yorkers' daily lives, and it's important to stay vigilant and practice safe behaviors even as we see improving numbers and rising vaccinations," Governor Cuomo said. "Our expansive network of vaccine distribution sites is serving more New Yorkers as supply increases and as we expand eligibility, but there's a long way to go before we get to the light at the end of the tunnel. New Yorkers should wear masks, wash their hands and stay socially distanced to slow the spread and save lives as we work to defeat the COVID beast together."

Today's data is summarized briefly below:  

• Test Results Reported - 243,153
• Total Positive - 6,747
• Percent Positive - 2.77%
• 7-Day Average Percent Positive - 3.11%
• Patient Hospitalization - 4,735 (-63)
• Net Change Patient Hospitalization Past Week - -442
• Patients Newly Admitted - 580 
• Hospital Counties - 53
• Number ICU - 955 (-44)
• Number ICU with Intubation - 665 (-21)
• Total Discharges - 151,906 (+552)
• Deaths - 80 
• Total Deaths - 39,311

Attorney General James Holds American Medical Collection Agency Responsible for 2019 Data Breach

 

AG James Co-Leads Bipartisan Coalition of 41 Attorneys General In Resolving Data Breach

Investigation That Exposed Personal Information of Up to 21 Million Americans

 New York Attorney General Letitia James today announced an agreement between a bipartisan coalition of 41 attorneys general from around the nation and the Westchester County debt collection agency Retrieval-Masters Creditors Bureau, d/b/a American Medical Collection Agency (AMCA), that resolves a multistate investigation into the company’s 2019 data breach. The breach exposed the personal information — including Social Security numbers, payment card information, and, in some instances, names of medical tests and diagnostic codes — of up to 21 million individuals, including 582,146 New Yorkers. AMCA is based in Elmsford, New York and specializes in small-balance medical-debt collection, primarily for laboratories and medical testing facilities.

“If companies are going to manage New Yorkers’ personal information, they must make every effort to protect that information,” said Attorney General James. “But AMCA’s security failures resulted in 21 million Americans having their data illegally accessed. I am committed to protecting New Yorkers’ personal data and will not hesitate to hold companies accountable when they fail to safeguard that information. Today’s agreement ensures that the company has the appropriate security and incident response plan in place so that a failure like this does not take place again.” 

Between August 1, 2018 and March 30, 2019, an unauthorized user gained access to AMCA’s internal system and was able to collect a wide variety of customers’ personal information. Despite numerous warnings from banks that processed its payments about a potential breach, AMCA failed to detect the intrusion. 

On June 3, 2019, AMCA provided notice to the states, including New York — which immediately opened an investigation. The company also simultaneously began providing notice to affected individuals. To help manage the harm from the exposure of personal information, AMCA offered affected individuals two years of free credit monitoring.

On June 17, 2019 — as a result of the costs associated with providing notification and remediating the breach — AMCA filed for bankruptcy. In order to continue the investigation and take steps to ensure that the personal information of their residents was protected, Attorney General James and other members of the multistate coalition participated in the bankruptcy proceedings. The company ultimately received permission from the bankruptcy court to settle with the multistate coalition, and, on December 9, 2020, the company filed for dismissal of the bankruptcy. 

Under the terms of today’s agreement, AMCA and its principals have agreed to implement and maintain a number of data security practices designed to strengthen its information security program and safeguard the personal information of consumers. These include:

• Creating and implementing an information security program with detailed requirements, including an incident response plan;
• Employing a duly qualified chief information security officer to oversee data safety practices at the company;
• Hiring a third-party assessor to perform an information security assessment; and
• Cooperating with the attorneys’ general investigation and maintaining evidence.

As part of the agreement, AMCA may also be liable for a $21 million payment to the states if the company violates the injunctive terms of the agreement. Because of AMCA’s financial condition, the payment will be suspended if no violation occurs.

Joining Attorney General James in co-leading this investigation were the attorneys general of Connecticut, Indiana, and Texas. They were joined by the attorneys general of Arizona, Arkansas, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Virginia, Washington, West Virginia, and the District of Columbia.

New York State Comptroller DiNAPOLI ANNOUNCES SALE OF $636 MILLION STATE OF NEW YORK GENERAL OBLIGATION BONDS

 

Competitive Offering to Feature Tax-Exempt and Taxable Bonds

 State Comptroller Thomas P. DiNapoli today announced the details of the competitive sale scheduled for March 16 of tax-exempt and taxable New York State General Obligation bonds, totaling $635.9 million. The state expects to sell $181.1 million for new money transportation, education and environmental purposes, and depending on market conditions, $454.8 million to refund a portion of certain outstanding General Obligation bonds to reduce the state’s debt service costs.

The net proceeds of $125.1 million of the new money portion of the Series 2021A Tax-Exempt Bonds will finance projects authorized by the following voter-approved bond acts: Environmental Quality (1986), Clean Water/Clean Air (1996), and Smart Schools (2014). The Series 2021A Tax-Exempt Bonds will mature over 14 years.

The net proceeds of $77.5 million of the new money portion of the Series 2021B Taxable Bonds will finance projects authorized by the following voter-approved bond acts: Environmental Quality (1986), Clean Water/Clean Air (1996), Rebuild and Renew New York Transportation (2005) and Smart Schools (2014). The net proceeds of $452.8 million of the refunding portion of the Series 2021B Taxable Bonds will refund certain outstanding General Obligation bonds. The Series 2021B Taxable Bonds will mature over 21 years.

The bonds are expected to be awarded pursuant to electronic competitive bidding to be held via BiDCOMP on behalf of the Comptroller of the State of New York on March 16, 2021, as set forth in the Notice of Sale published in The Bond Buyer on March 11, 2021. The bonds will be dated on the date of delivery, expected to be March 23, 2021.

Dependent on market conditions, the State of New York reserves its right to change, amend or cancel this scheduled sale of General Obligation Bonds.

A copy of the Preliminary Official Statement is available.

Find out how your government money is spent at Open Book New York. Track municipal spending, the state's 180,000 contracts, billions in state payments and public authority data. Visit the Reading Room for contract FOIL requests, bid protest decisions and commonly requested data.

Governor Cuomo Announces Quarantine for Domestic Travel Will No Longer Be Required Starting April 1st

 

While No Longer Required, Quarantine After Domestic Travel is Still Advised as Added Precaution

Mandatory Quarantine Remains in Effect for International Travelers

All Travelers Covered Must Continue to Fill Out Traveler Health Form Upon Arrival Into New York State

 Governor Andrew M. Cuomo today announced that domestic travelers will no longer be required to quarantine after entering New York from another U.S. State or U.S. Territory starting April 1st. While no longer required, the NYS Department of Health still recommends quarantine after domestic travel as an added precaution. Mandatory quarantine remains in effect for international travelers. All travelers must continue to fill out the Traveler Health Form. Individuals should continue strict adherence to all safety guidelines to stop the spread - wearing masks, socially distancing and avoiding gatherings.

"New Yorkers have shown strength and perseverance throughout this entire pandemic, and it shows through the numbers that continue to decrease every day," Governor Cuomo said. "As we work to build our vaccination infrastructure even further and get more shots in arms, we're making significant progress in winning the footrace between the infection rate and the vaccination rate, allowing us to open new sectors of our economy and start our transition to a new normal in a post-pandemic world. As part of that transition, quarantine for domestic travelers is no longer required, but it is still being advised as an added precaution. This is great news, but it is not an all-clear for New Yorkers to let their guard down. To beat this virus once and for all we all must continue doing what we know works to stop the spread, including wearing masks, washing our hands and practicing social distancing."

Regardless of quarantine status, all individuals exposed to COVID-19 or returning from travel must:

• Continue daily symptom monitoring through Day 14;
• Continue strict adherence to all recommended non-pharmaceutical interventions, including hand hygiene and the use of face coverings, through Day 14 (even if fully vaccinated);
• Must immediately self-isolate if any symptoms develop and contact the local public health authority or their healthcare provider to report this change in clinical status and determine if they should seek testing.