IRS seeks identities of investors in Stanford bank

AP News
Posted: Dec 02, 2009 4:21 PM

The Internal Revenue Service wants the names of U.S. taxpayers who have foreign accounts with companies owned by indicted billionaire R. Allen Stanford, according to court papers filed Wednesday.

The IRS asked a federal judge to order the court-appointed receiver now running Stanford's companies to identify American investors who held foreign accounts in Stanford entities from 2002-08.

The revenue service said it has evidence suggesting that some Stanford investors were underreporting their income or evading taxes. The total amount is unknown.

The government has accused Stanford in civil and criminal charges of running a $7 billion Ponzi scheme.

IRS agent Daniel Reeves said in court papers that he has "a reasonable basis to believe United States taxpayers with undisclosed offshore accounts with Stanford International Bank are not in compliance with internal revenue laws."

"The Internal Revenue Service has long been concerned with the growing problem of United States taxpayers evading the reporting or payment of United States taxes by concealing assets in ... offshore jurisdictions," Reeves said.

A 2006 Senate report estimated that Americans illegally evade between $40 billion and $70 billion in U.S. taxes each year through offshore tax schemes. The IRS would audit some of the Stanford foreign account holders once the agency learns their identities, Reeves said.

The IRS also wants to determine if Stanford's American clients filed "Reports of Foreign Bank and Financial Accounts" _ known as FBARs. Such reports are required if the value of any foreign account exceeds $10,000. The certificates of deposit available at Stanford's Antiguan Bank, which are at the heart of the alleged fraud, required a minimum investment of $50,000.

An attorney who works for receiver Ralph Janvey, who would be subject to the court order, did not respond to phone or e-mail messages.

The request appears to be part of a larger crackdown against taxpayers who avoid taxes by stashing money overseas. In August, the Swiss government and Swiss bank UBS AG agreed to disclose the names of 4,450 U.S. taxpayers believed to be hiding assets in secret bank accounts.

Last month, nearly 15,000 Americans disclosed billions in offshore bank accounts under a voluntary program allowing most to avoid criminal prosecution if they paid back taxes and interest. In a typical year, just 100 taxpayers disclose foreign accounts.

"This is another crucial step in our ongoing effort to pursue hidden offshore assets," IRS spokesman Frank Keith said. "This enforcement action ... will not only help us pursue those who evade their taxes, but also aggressively identify third parties and others who assist with these illegal actions."

Stanford is jailed in the Houston area awaiting trial on charges that he ran a $7 billion Ponzi scheme by promising huge returns on CDs from the now-closed Stanford International Bank in Antigua to about 28,000 investors. The Securities and Exchange Commission said he instead used the money from new investors to pay off old ones. The agency also accuses him of skimming more than $1 billion to fund his lavish lifestyle.

Stanford denies the allegations.