Markus Hager, Tax Evasion, New York 2011

NEW YORK, NY – Markus Hager, a 68-year-old New York City resident, has pleaded guilty to using sham foreign entities and secret foreign accounts in Switzerland and Israel to evade taxes, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Robert L. Capers of the Eastern District of New York.

According to information presented in court, between 1987 and 2011, Hager utilized a series of undeclared foreign financial accounts to evade his individual income taxes by concealing assets and income from the IRS in those accounts. Hager maintained several undeclared accounts at UBS, including two numbered accounts and an account held in the name of Contactus Partnership Associated S.A. (Contactus), a sham British Virgin Islands entity.

Between 1987 and 2008, Hager maintained several undeclared accounts at UBS, including two numbered accounts and an account held in the name of Contactus Partnership Associated S.A. (Contactus), a sham British Virgin Islands entity. By the close of 2004, the value of Hager’s undeclared accounts at UBS exceeded $7.3 million. Hager closed the UBS accounts in 2008 and transferred the assets to a newly opened account at Clariden Leu, which he controlled and held in the name of Contactus.

Hager caused that Swiss bank to falsely record Hager’s Belgian cousin as the owner of the assets in the Contactus account. Approximately six months later, Hager closed the Contactus account at the Swiss bank and transferred the assets to an account at a bank in Israel that Hager caused to be opened in the name of a different Belgian cousin. From 2005 to 2011, Hager also controlled an undeclared account at Bank Leumi in Israel, which he falsely held under the name of a relative who was not a U.S. person and who resided outside the United States.

Hager repatriated funds from his undeclared foreign financial accounts by having an attorney draft a sham loan agreement between himself and Contactus and wiring funds from some of his undeclared foreign financial accounts into his attorney’s escrow account. According to the information filed, Hager evaded approximately $652,580 in federal taxes for tax years 2003 through 2005 and 2007 through 2010.

“In pleading guilty today, Markus Hager became another example of an individual who attempted to conceal the true source of his money‎ and was caught,” said Chief Richard Weber of IRS-Criminal Investigation (IRS-CI). “IRS-CI will continue to take every step necessary to ferret out those who attempt to hide their assets and income from the IRS.”

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