IRS Increase Pressure on International Schemes

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Wednesday, January 1, 2003
Author: 
Bruce Zagaris
Volume: 
19
Issue: 
1
7
Abstract: 
On November 14, 2002, a U.S. District Court sentenced Wayne Anderson, 63, and Richard Marks, 59, in connection with an offshore tax crime and money laundering scheme. Anderson?s Ark & Association was an organization that helped clients structure shell companies and bank accounts located in the U.S., Costa Rica, and several European and Caribbean offshore financial centers. More than $40 million went into an account in Costa Rica during a three-year period. In order to conceal the nature of the transfers, the IRS said the transfers were mis-characterized as charitable contributions and payments for consulting services. IRS agents working in an undercover capacity posed as Anderson?s Ark clients laundered $370,000 through Anderson?s Ark accounts. Marks, who served as chief account for Anderson?s Ark, received 81 months in prison, a three-year term of supervised release, and a fine of $25,000. The U.S. has convicted nine persons of felonies in federal courts as part of the criminal activities of Anderson?s Ark. On August 12, 2002, the U.S. Court of Appeals for the Ninth Circuit affirmed the conviction of Don Pace for subscribing a false tax return, in violation of 26 U.S.C. §203(1) although it reversed his conviction for two counts for wire fraud, in violation of 18 U.S.C. §43. His conviction for wire fraud was overturned because of improper venue. The case was tired in Arizona because the prosecutor argued that the wire fraud scheme was begun or at least continued while he was in Arizona. Alternatively, the prosecution argued that the venue was proper under the high seas statue (18 U.S.C. §238) because the wire transfers originated in Mexico. The appellate court found that venue is proper only in those locations where the wire transmission at issue originated, passed through, was received, or from which it was caused. The high seas venue provision did not apply because the wire fraud was not started on the high seas or ?out of the jurisdiction of any particular State or district? and was committed in part in the U.S.