From the Tax Law Offices of David W. Klasing - Film Producer and Accountant Indicted for Multi-Million Dollar Offshore Tax Fraud Scheme

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Tax Law Offices of David W. Klasing, PC

Sep 17, 2024, 06:37 ET

IRVINE, Calif., Sept. 17, 2024 /PRNewswire/ -- According to a Department of Justice press release, a film producer and an Australian accountant have been indicted for their roles in a decades-long conspiracy to defraud the United States by concealing over $25 million in income and assets offshore. This case highlights the potentially severe repercussions of evading federal income tax. If you have failed to file a tax return for one or more years, or have filed a tax return that was knowingly false, it is crucial to discuss your situation with an experienced tax defense attorney in order to come back into compliance without facing criminal tax prosecution.

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Defendants Allegedly Concealed Millions Abroad, Causing Over $5 Million in Tax Loss

Court records reveal that Nigel Sinclair, a film producer who founded several profitable movie production companies, and Anthony Stewart, an accountant from Australia, worked together to hide Sinclair's large amount of income from the IRS. In 2000, Sinclair co-owned Intermedia, a film production company and allegedly owned half of his shares through a Maltese nominee entity he controlled. When Intermedia was listed on a foreign stock exchange, Sinclair allegedly sold his shares for approximately $25 million. He and Stewart then allegedly hid those proceeds from tax authorities by depositing them into nominee bank accounts in Switzerland.

Sinclair is accused by federal authorities of using the concealed funds (described above) for personal expenses, including flying on private jets, purchasing an $800,000 guitar owned by a famous rock musician, funding his next production company, and building a large vacation home in Wyoming. Stewart and others allegedly used corporate entities and fabricated documents to disguise the true ownership structure and sources of the funds Sinclair used.

As the investigation continued, Sinclair, Stewart, and those working with them allegedly took steps to avoid detection by federal authorities. These steps are alleged to have included moving assets into new nominees' names, getting rid of incriminating documents by flushing them down the toilet, communicating in code, and using burner phones. In 2015, Sinclair attempted to use the IRS's Streamlined Domestic Offshore Procedures but allegedly made false statements and under-reported his foreign assets. He also allegedly failed to report his foreign bank accounts on required FBARs for 2016 and 2017. In 2020, Sinclair allegedly encouraged a co-conspirator to present a false narrative to U.S. authorities during a grand jury investigation.

Sinclair's actions allegedly caused a tax loss of more than $5 million to the IRS. If convicted, both Sinclair and Stewart face a maximum penalty of five years in prison for conspiracy. Sinclair also faces additional potential penalties for filing false tax returns and FBARs, including up to three years in prison for each false tax return charge, up to five years for each false FBAR count, and up to 20 years for the obstruction charge. Additionally, the defendants may be ordered to serve periods of supervised release and may be required to pay restitution.

The Importance of Legal Counsel When You've Fallen Out of Tax Compliance

The case of Nigel Sinclair and Anthony Stewart underscores the serious repercussions of tax evasion and fraud, which can include substantial prison time and significant financial penalties. If you have failed to file a tax return or have filed a false tax return, it is in your best interest to consult with a seasoned tax attorney. Together, you can assess your situation, understand your options, and develop a plan to bring you back into compliance with the law.

If you have failed to file a tax return for one or more years or have taken a position on a tax return that could not be supported upon an IRS or state tax authority audit, eggshell audit, reverse eggshell audit, or criminal tax investigation, it is in your best interest to contact an experienced tax defense attorney to determine your best route back into federal or state tax compliance without facing criminal prosecution.

Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.

It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.

Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.

As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!

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We Are Here for You

Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our fully staffed main office in downtown Irvine California, the Tax Law Offices of David W. Klasing has unstaffed (conference room only) California based satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad, Sacramento. We also have unstaffed (conference room only) satellite offices in Las Vegas Nevada, Salt Lake City Utah, Phoenix Arizona & Albuquerque New Mexico, Austin Texas, Washington DC, Miami Florida and New York New York that solely handle Federal & California Tax issues.

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Public Contact: Dave Klasing Esq. M.S.-Tax CPA, [email protected]

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