US Bank Director’s Secret Bermuda Account

US prosecutors yesterday [May 18] charged a Boston bank director with failing to report income hidden in a secret HSBC bank account in Bermuda, the “Wall Street Journal” has reported.

The leading financial and business newspaper describes the proesution as the latest move by Washington in ongoing efforts to combat off-shore tax evasion.

Michael Schiavo, a director at Boston Private Bank and Trust Company, agreed to plead guilty and will also pay a civil penalty of $76,283, according to the US Department of Justice. He faces up to five years in prison and a $250,000 fine for hiding funds in the Bermuda account and withholding taxes from the US Treasury.

Mr. Schiavo, 53 and the managing director of Boston-based venture consulting company SCG Consulting Group, hid $99,273 from an investment in a medical-device company in an account at HSBC Bank Bermuda, according to a complaint filed Thursday in a Massachusetts federal court. Mr. Schiavo’s business partner, Peter A. Schober, wired the investment funds to the Bermuda bank from a secret Swiss account in 2006.

Between 2003 and 2008, Mr. Schiavo secretly maintained an account at the Bermuda bank with a balance ranging from $65,000 to $150,000, according to court documents. Mr. Schiavo did not pay the $40,624 he would have owed the US Internal Revenue Service in taxes on that income.

In 2009 Mr. Schiavo amended his previous tax reports and paid back taxes, but did not voluntarily disclose his accounts, the Justice Department said.

In February, the US Internal Revenue Service announced a new leniency program that offers reduced penalties to tax scofflaws who voluntarily report their offshore accounts

#AmericanRelations #HSBCBank #InternationalCrime

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