[118556] in Cypherpunks
Cayman bank bends over
daemon@ATHENA.MIT.EDU (Anonymous)
Sat Oct 2 03:43:10 1999
Date: Sat, 2 Oct 1999 09:24:22 +0200 (CEST)
Message-Id: <199910020724.JAA21106@mail.replay.com>
From: Anonymous <nobody@replay.com>
To: cypherpunks@algebra.com
Reply-To: Anonymous <nobody@replay.com>
10/2/99 -- 2:43 AM
Video producer admits tax evasion in Cayman bank case
NEWARK, N.J. (AP) - A video producer faces up to five years in
prison and hefty fines after
pleading guilty to using a Cayman Islands bank to evade as much as
$40,000 in taxes over three
years.
Michelle A. Pruyn admitted Friday she concealed $240,000 at the
now-defunct Guardian Bank &
Trust Ltd. of Grand Cayman by working with its chairman, John M.
Mathewson.
Authorities say many others could face similar charges now that
Mathewson has pleaded guilty to
charges and cooperated with authorities by providing lists of
depositors to U.S. authorities.
The records exposed perhaps 1,500 U.S. citizens as tax cheats, the
FBI said, representing a massive
breach of the vaunted bank secrecy of the tiny British colony in
the Caribbean.
Mathewson opened an account for Ms. Pruyn in the name of Cogan
Corp. about 1991, and she
deposited income from her video production companies. No evidence
exists that Cogan conducted
any business, prosecutors said.
Ms. Pruyn, 45, admitted that with funds from the Cogan account, she
bought a building and had the
property held in trust for her children. She filed for bankruptcy
in 1996, but did not disclose her
interest in the building or the offshore Cogan account, she admitted.
Ms. Pruyn, who pleaded guilty to bankruptcy fraud and tax evasion,
faces up to five years in prison
and $250,000 in fines, as well as an order to pay back taxes and
penalties, at sentencing Dec. 21.
Citing Mathewson's ``unparalleled'' cooperation, a federal judge in
August sentenced him to six
months under house arrest, a $30,000 fine and 500 hours of
community service.
The sentencing revealed that Mathewson had pleaded guilty in March
1997 to charges including
conspiracy, money laundering and aiding income tax evasions as part
of plea bargains with federal
prosecutors in Florida, New Jersey and New York. He could have
faced nearly five years in prison.
Because of Mathewson's help, the U.S. government has recouped $50
million in back taxes and
penalties, and can expect to get a total of $300 million, his
lawyer has said. Authorities have not
confirmed those figures.
The Caymans, with just 40,000 residents, are home to 580 banks,
whose deposits make it the
world's fifth-largest banking center. Its secrecy laws make it a
haven for shelter money, whether
legitimate income or ill-gotten gains, U.S. officials say.
