Kentucky Man Hid $780,000 in Swiss Bank Accounts

Kentucky Man Hid $780,000 in Swiss Bank Accounts

Peter Canale, a 62-year-old resident of Jamestown, Kentucky, pleaded guilty to hiding hundreds of thousands of dollars in secret Swiss bank accounts, according to a guilty plea entered in Manhattan federal court.

Canale maintained his undeclared accounts at multiple Swiss banks for approximately ten years, from 2000 through 2010, with the accounts reaching a high value of over $780,000. He failed to file Reports of Foreign Bank and Financial Accounts (FBARs) with the Internal Revenue Service (IRS) and filed false Forms 1040 with the IRS.

According to the superseding Information filed in Manhattan federal court, Canale’s relative initially maintained an undeclared offshore bank account at a predecessor firm of the Swiss bank UBS AG, which continued after the relative’s death in July 2000. Canale then opened an undeclared account at Wegelin & Co. (Wegelin), a Swiss private bank, in the name of a sham foundation organized under the laws of Liechtenstein.

As of December 31, 2009, the Janara Foundation account at Wegelin held assets valued at approximately $788,920. In May 2010, the assets were transferred to another Swiss private bank, where they were valued at approximately $718,143 as of October 31, 2010.

Canale faces a maximum sentence of five years in prison and has agreed to pay a civil penalty of $394,460, file amended tax returns, and pay back taxes of $106,820. He is scheduled to be sentenced by Judge Katherine B. Forrest on December 3, 2015.

U.S. Attorney Preet Bharara praised the outstanding efforts of the IRS-CI in the investigation and thanked the U.S. Tax Division for their assistance. The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.

This case highlights the importance of complying with tax laws and reporting foreign bank accounts. It also underscores the consequences of hiding assets in secret bank accounts, including the risk of prosecution and significant financial penalties.