It’s one thing to hide a few dollars. It’s quite another to hide a few million dollars. The IRS’s assault on UBS, the Swiss bank, has reaped some more indictments. This time, three individuals involved in venture capital are alleged to have hidden away millions of dollars and a golf course in Colorado through secret Swiss accounts.
Stephen M. Kerr and Michael Quiel were Phoenix businessmen; among their businesses were two venture capital firms. The goal of such firms is to invest in start-up companies, and hope to take a few “public” (on stock exchanges) and reap large rewards. If the Department of Justice is correct, Mr. Kerr and Mr. Quiel had an additional method of making money.
They are alleged to have partnered with a former San Diego attorney, Christopher Rusch, to have used UBS to hide money and control of corporations. From the Department of Justice press release:
Beginning in or before 2004, and continuing through at least December 2007, Kerr and Quiel obtained control of shares of stock of publicly traded domestic companies in a way that concealed their ownership of the stock. Kerr and Quiel then deposited the stock, or proceeds from the sale of the stock, to multiple undeclared bank accounts set up with the assistance of Rusch at UBS in Switzerland and at another Swiss bank. These accounts were all held in the names of nominee entities to further conceal Kerr’s and Quiel’s ownership. Kerr and Quiel also used the accounts to conceal income earned from the subsequent sale of this stock from the IRS. In 2007, the combined total net assets in Kerr’s accounts exceeded $5.6 million and Quiel’s accounts exceeded $2.6 million. Rusch maintained signature authority over the secret accounts and, with the assistance of a Swiss account manager and financial intermediary, facilitated transactions on behalf of Kerr and Quiel.
Mr. Rusch is also accused of having his own secret offshore accounts at UBS and a bank in Panama. It appears Mr. Rusch’s website is still active. The indictment was handed down in early December but was not released until the three were in custody (today). It probably wasn’t difficult for the DOJ to find Mr. Rusch; a quick Google search noted that he resided in Panama part-time as of 2010. I find it interesting to note that Mr. Rusch was a tax attorney.
In any case, the three are accused of conspiracy, FBAR violations, and filing false tax returns. All are looking at a lengthy stay at ClubFed if found guilty.
