The U.S. Department of Justice and the United States Attorney’s Office for the Central District of California announced today another guilty plea in an FBAR case, this time a doctor who resides in Laguna Beach. The DOJ press release can be found here. The case is a spin off of a prior case prosecuted in the Central District (which includes LA, Orange, and Riverside Counties), the trial of David Kalai and Nadav Kalai, father and son, who were convicted for their part in setting up foreign corporations and undisclosed foreign to help clients evade taxes. The relevant part of the press release provides:
According to court documents and evidence introduced at the trial of David and Nadav Kalai, Fogel was a doctor who operated several managed health care businesses. David Kalai suggested to Fogel that he could reduce his taxes by transferring money to a foreign bank account held in the name of a foreign corporation. David Kalai advised Fogel to open up the bank account that was set up in the name of a British Virgin Islands corporation. At a meeting facilitated and attended by David Kalai at the Beverly Hills branch of Bank Leumi, Fogel executed documents to open his Luxembourg bank account at Bank Leumi. According to court documents, Fogel diverted at least $8 million to his undeclared bank account at Bank Leumi’s branch in Luxembourg.
Fogel agreed, as part of the plea agreement, to pay a civil penalty of approximately $4.2 million dollars. The next big question is what is going to happen at sentencing, especially if that large penalty is paid. There has been a noticeable pattern of below-guidelines sentences in FBAR cases, as noted in my prior post here.