More On Legal & Compliancefrom The Advisor's Professional Library
- The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
- Regulatory Oversight of Investment Advisors Although the regulatory environment is in a state of flux, it is imperative that RIAs adhere to their compliance obligations. To ensure compliance, RIAs and IARs must fully understand what those obligations are.
A word of advice—if you plan to help clients hide assets from the IRS, don’t inadvertently mail an incriminating list of names and account numbers that somehow ends up in the hands of regulators.
Sounds obvious, but it’s exactly what happened to Swiss financial advisor Beda Singenberger.
Federal prosecutors charge that over an 11-year period, Singenberger helped 60 people in the U.S. hide $184 million in secret offshore accounts, according to Bloomberg. He attached colorful names like Real Cool Investments Ltd. and Wanderlust Foundation.
Then, according to the news service, Singenberger inadvertently mailed a list of his U.S. clients, including their names and other details, which eventually wound up with federal authorities.
Bloomberg says U.S. authorities appear to be picking off the clients on that list one by one. Among those affected: Jacques Wajsfelner, an 83-year-old exile from Nazi Germany, and Michael Canale, a retired U.S. Army surgeon. Another customer, cancer researcher Michael Reiss, pleaded guilty, though his court records don’t mention the list.
“He was sending mail to someone in the United States, and apparently in error he included a list of U.S. taxpayers,” Assistant U.S. Attorney Dan Levy said on March 5 at Wajsfelner's sentencing in New York. “The government has mined that list to great effect and prosecuted a number of people who were on that list.”
Wajsfelner, who pleaded guilty to hiding $5.7 million from the Internal Revenue Service, was sentenced to three months of house arrest.
The case comes as negotiations continue between Swiss banks and U.S. authorities over the latter’s access to once secretive accounts. Long a haven for ultrawealthy individuals and families, the United States has increased pressure in recent years to open accounts of suspected tax cheats.