Ben Zion Birman, Willful Failure to File FBAR, California 2018

LOS ANGELES – In a shocking turn of events, Ben Zion Birman, a Los Angeles man, has pleaded guilty to willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR) with the Department of Treasury, announcing Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Tax Division.

According to court documents, Birman, of Los Angeles, California, held offshore accounts in Israel at Bank Leumi Le-Israel B.M. from 2006 to 2011, with over $1 million in Bank Leumi accounts as of calendar year 2010. Despite this, Birman failed to file the required FBAR for that year.

In an effort to further hide his money, Birman instructed Bank Leumi to hold bank mail from delivery to the United States, and obtained access to his offshore funds through the use of ‘back-to-back’ loans, which were designed to enable borrowers to tap their concealed accounts. These lending arrangements permitted Birman to have funds issued by Leumi’s U.S. branch that were secretly secured by funds in his undeclared accounts in Israel.

This case is a stark reminder of the importance of complying with tax laws and reporting foreign financial accounts. U.S. citizens, resident aliens, and permanent legal residents with a foreign financial interest in or signatory authority over a foreign financial account worth more than $10,000 are required to file an FBAR each year disclosing the account.

The Tax Division has been actively pursuing cases like Birman’s, and the Tax Division thanks the U.S. Attorney’s Office of the Central District of California for its assistance in this case. Principal Deputy Assistant Attorney General Zuckerman commended special agents from IRS-Criminal Investigation, who are investigating the case, and Tax Division Trial Attorneys Leslie Goemaat and Melissa Schraibman Grinberg, who are prosecuting the case.

Birman faces a maximum sentence of five years in prison, as well as a period of supervised release, restitution and monetary penalties. His sentencing is scheduled for December 10, 2018. The Tax Division is committed to vigorously investigating and prosecuting offshore account holders who maintain undeclared accounts and willfully ignore their U.S. reporting and tax obligations.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website. This case serves as a warning to those who would attempt to evade their tax obligations by hiding assets in foreign accounts. The Tax Division will continue to pursue cases like Birman’s to ensure that all individuals comply with the law and pay their fair share of taxes.

Related Federal Cases