Another tax evader pleads guilty
In Miami, this morning, Jeffrey Chernick, a 70 year old New York business man pled guilty and was sentenced by a federal court judge in Florida to 3 months imprisonment followed by 12 months probation, said court spokesperson.
Jeffrey Chernick evaded tax by maintaining Swiss bank accounts including one at USB. At one point he hid more than $ 8 million from the IRS. Jeffery Chernick was facing a long prison sentence and a hefty fine, but he turned government informant and received a lighter sentence.
The US government has been trying to get at wealthy US investors who have evaded tax laws by investing their money in Swiss accounts, especially Swiss bank USB AG. The government did receive a break and from insider information now have a long list of these people. This is the second case this week where a previous US client of the Swiss bank has been treated leniently because of assistance provided to federal authorities.
Jeffrey Chernick’s lawyers had sought probation for their client but instead he got a 3 month sentence. However, Mr Chernick will still have to pay the tax penalty which is equivalent to 50% of the highest total of his foreign investments, which means about $4 million. The judge accepted the tax penalty and did not enforce any other penalty.
After decades of going back and forth, The US authorities finally worked out a deal with USB executives last august whereby the bank agreed to turn over names of close to 4000 wealthy US clients who had money invested in undisclosed accounts.
Just this past week, Steven Michael Rubinstein, who also cooperated in the UBS investigation, was sentenced to 12 months house arrest and a huge fine on Wednesday for his role in avoiding taxes on millions of dollars.
Authorities called Chernick’s assistance considerable in an investigation that centered on Americans with anonymous offshore accounts at UBS; it is believed that Chernick’s evidence helped penetrate the legendary secrecy laws of Swiss banks. Chernick’s information was vital and led to the indictment last summer of Swiss banker Hansruedi Schumacher and Zurich attorney Matthias Rickenbach. These two individuals were accused in a Florida court of abetting wealthy Americans to trade secret accounts from UBS to Neue Zuercher Bank (NZB), a private banking facility to hide money from IRS.
The Swiss government is also in the process of charging Schumacher and Rickenbach of breaking certain banking laws.
The federal government has an amnesty for all those on the USB list to come forward and pay the tax penalties. The government has been relentless in pursuing these tax evaders and is in no mood for sympathy. Rest assured that who do miss the amnesty deadline will be penalized heavily.