Virginia Doctor Pleads Guilty to Conspiracy Involving Undeclared Swiss Bank Account

A Virginia doctor, Dr. Andrew Silva, pleaded guilty in connection with a $250,000 bank account that he inherited from his mother. While the facts of the case are unremarkable, the fact that he was criminally prosecuted for a relatively small foreign account and that a bank other than UBS was involved (the bank name wasn't released) may be indicative of more aggressive and wider scope of criminal investigations by the IRS. From the limited information provided in the DOJ news release, it appears that there was active concealment by Dr. Silva, including setting up a sham Liechtenstein trust and carrying $235,000 in cash. Tax practitioners advising foreign account holders should consider carefully whether they think criminal charges are a possibility in a given fact pattern, especially when there is any evidence of active efforts to conceal.

Many investor clients of private equity firms have had to deal with foreign account issues recently. In this climate of active criminal prosecution, it may be prudent to refer all such clients to legal counsel, even where the facts are seemingly very benign.