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Anatomy of a FATCA case

Jaclyn Jaeger | September 28, 2018

On Sept. 11, the Department of Justice secured its first ever criminal conviction under the Foreign Account Tax Compliance Act (FATCA), through the guilty plea of Adrian Baron, former chief executive officer of Loyal Bank, an off-shore bank with offices in Budapest, Hungary, and Saint Vincent and the Grenadines. The guilty plea was entered before U.S. District Judge Kiyo Matsumoto of the Eastern District of New York. When sentenced, Baron faces a maximum of five years in prison.

Enacted in 2010 and implemented in July 2014, FATCA requires foreign financial institutions to report information to the IRS on funds held by U.S. taxpayers in accounts at banks outside the United States, including accounts of certain foreign entities with substantial U.S. owners. FATCA’s primary aim is to prevent tax evasion by U.S. residents through offshore accounts.

According to court documents, an undercover agent in June 2017 met with Baron and explained that he was a U.S. citizen...

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