A California man has pleaded guilty to filing a false federal tax return, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division.
Israel Birman pleaded guilty yesterday in U.S. District Court for the Central District of California to filing a false federal tax return on which he failed to report interest income he earned from bank accounts at Bank Leumi Le-Israel B.M.
According to court documents, between 2006 and 2014, Israel Birman held offshore bank accounts in Israel at Bank Leumi and Israel Discount Bank. The accounts had balances over $10,000 each year, which required the filing of Reports of Foreign Bank and Financial Accounts (FBARs) with the Department of the Treasury.
Between 2006 and 2014, Israel Birman did not file FBARs as required. In 2013, Israel Birman’s bank accounts at Israel Discount Bank had a total value of over $3.4 million. Israel 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 from Bank Leumi USA collateralized by his undeclared Bank Leumi offshore funds.
In 2009 and 2010, Israel Birman earned taxable interest income on his Bank Leumi bank accounts totaling over $187,000. He failed to report that interest income on his 2009 and 2010 federal tax returns.
“The Justice Tax Division continues to vigorously investigate and prosecute offshore account holders who maintain undeclared accounts and willfully ignore their U.S. reporting and tax obligations,” said Principal Deputy Assistant Attorney General Zuckerman.
Israel Birman’s plea agreement includes a requirement that he pay a civil penalty of not less than $1,709,883, representing fifty percent of the balance in his Israel Discount Bank account in 2013.
He faces a maximum sentence of three years in prison, as well as a period of supervised release, restitution and monetary penalties.
Sentencing is scheduled for January 28, 2019, at U.S. District Court for the Central District of California.
Key Facts
- State: California
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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