Jack Barouh founded Michele Watches, a luxury brand. He sold the company to Fossil, Inc. in 2004 for $50 million. Mr. Barouh, a Holocaust survivor, in another American success story.
But Mr. Barouh had a problem. He remembered the holocaust, and he took money and hid it in various overseas accounts to avoid a recurrence of losing everything. He began putting the money aside in 1976. That wouldn’t be an issue, except he ran afoul of US foreign account reporting laws. Additionally, with millions of dollars in various foreign accounts that earned interest, he needed to report the income on his tax return.
He didn’t.
He pleaded guilty in February to one count of filing a false tax return. Mr. Barouh has paid $5 million in fines for not reporting his foreign accounts, and he will be paying his back taxes, interest, and penalties to the IRS.
Mr. Barouh was sentenced last week to ten months at ClubFed. He’s cooperating with the IRS and Department of Justice into their investigation of UBS. He’s given the government names of two bankers and an attorney. “The information he’s provided, we are using,” Assistant U.S. Attorney Jeffrey Neiman told the Associated Press. “It is ongoing.”