Feb. 12 (UPI) — A former University of Rochester business professor will spend seven months in prison after being convicted of stashing more than $200 million in Credit Suisse bank accounts to avoid paying U.S. taxes.
Daniel Horsky, 71, was charged with using the Swiss bank to hide profits made from investing in two start-up companies over the course of 15 years, prosecutors said. Horsky avoided paying some $18 million in U.S. taxes as a result of the scheme, prosecutors said.
In addition to the seven-month prison term, Horsky previously agreed to pay more than $100 million in fines and penalties. In addition to the prison term, U.S. District Judge T.S. Ellis III ordered him to pay an additional $250,000 criminal fine as part of the sentence.
Investigators for the IRS and federal prosecutors have aggressively pursued tax avoidance cases, though federal judges have generally taken a light hand in sentencing because of the legal vagaries involved in international banking and investing. While the U.S. government considers such tax avoidance schemes a criminal act, such plans are legal in Switzerland and many other countries.
“For 15 years, Dan Horsky stashed assets and hid income offshore in secret bank accounts,” said Acting Deputy Assistant Attorney General Stuart Goldberg. “That scheme came to an abrupt end when IRS special agents came knocking on his door. The days of hiding behind shell corporations and foreign bank secrecy laws are over. Now is the time for accountholders to come in, accept responsibility, and help ensure that the lawyers, financial advisers and other professionals who actively facilitated offshore evasion also are held accountable.”
Credit Suisse assisted Horsky in keeping his assets at the bank, even after it agreed to begin closing accounts held by U.S. citizens. The bank arranged for Horsky’s accounts to be transferred into the name of an unidentified person who renounced his U.S. citizenship in order to keep control of the assets at the foreign bank. Further complicating the scheme, Horsky claims citizenship in the United States, United Kingdom and Israel, allowing him to stash money in different accounts to avoid U.S. income taxes.
Horsky resigned his position as a professor emeritus at University of Rochester and is no longer affiliated with the central New York school, the Rochester Democrat and Chronicle reported. He will begin serving his prison sentence in May.