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Two Cayman Island Financial Firms Plead Guilty in Tax Evasion Scheme
Two Cayman Island financial institutions, Cayman National Securities Ltd. (CNS) and Cayman National Trust Co. Ltd. (CNT), pleaded guilty in Manhattan federal court to conspiring to hide more than $130 million in offshore accounts from the US Internal Revenue Service (IRS) and evading taxes on the income earned in those accounts.
According to the indictment, CNS and CNT, which are both located in Grand Cayman and organized under the laws of the Cayman Islands, assisted certain US taxpayers in evading their US tax obligations to the IRS and otherwise hiding accounts held at CNS and CNT from the IRS, from at least 2001 through 2011.
US Attorney Preet Bharara for the Southern District of New York, Acting Deputy Assistant Attorney General Stuart Goldberg of the Justice Division’s Tax Division, and Chief Richard Weber for the Internal Revenue Service – Criminal Investigation, announced the guilty pleas of CNS and CNT, marking the first convictions of financial institutions outside Switzerland for conspiring with US taxpayers to evade their lawful and legitimate taxes.
The plea agreements require CNS and CNT to produce through the treaty process account files of non-compliant US taxpayers who maintained accounts at CNS and CNT, and pay a total of $6 million in financial penalties. The plea proceeding took place today before the Honorable US District Judge Thomas P. Griesa for the Southern District of New York.
“The guilty pleas of these two Cayman Island companies today represent the first convictions of financial institutions outside Switzerland for conspiring with US taxpayers to evade their lawful and legitimate taxes,” said US Attorney Bharara. “The plea agreements require these Cayman entities to provide this office with the client files, because we are committed to finding and prosecuting not only banks that help US taxpayers evade taxes, but also individual taxpayers who find criminal ways not to pay their fair share.”
Chief Weber added, “The veil of secrecy has been lifted from what was once a common place for criminals to hide their money offshore. The IRS and Justice work aggressively to require banks to follow the laws and not turn a blind eye to criminal activity. When individuals and entities hide behind shell corporations and numbered bank accounts, they are not only cheating the US government, they are cheating the honest taxpaying citizens who are obeying the law and doing the right thing.”
The convictions of CNS and CNT send a strong message that the US government will not tolerate tax evasion and will aggressively pursue those who attempt to hide their assets offshore. The case is a significant step forward in the fight against tax evasion and money laundering, and demonstrates the commitment of the US government to ensuring that all taxpayers play by the rules.”
Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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