How a Business Professor stashed $200m in Credit Suisse Group AG

by on February 13, 2017
A former client of Cred­it Suisse Group AG who pleaded guilty to hid­ing $200 million from U.S. tax authorities is at the cen­ter of a struggle between the Justice Department, which wants to send a stern mes­sage by sending tax cheats to prison, and U.S. judges, who have opted for leniency in past cases.
Dan Horsky, a retired busi­ness professor from Roches­ter, New York, pleaded guilty Nov. 4 to using secret Swiss bank accounts to hide assets and income from the Inter­nal Revenue Service and New York tax authorities. Prose­cutors urged a judge to send him to prison for 20 months. Horsky’s lawyers said he de­serves probation because he helped with a criminal inves­tigation of the bank and will pay at least $124 million in penalties.
U.S. District Judge T.S. Ellis III is set to impose a sentence on Friday in federal court in Alexandria, Virginia. Doz­ens of wealthy U.S. tax de­fendants who used offshore accounts have avoided pris­on or received terms far be­low those recommended by advisory guidelines, as judg­es have consistently ruled against Justice Department prosecutors.
What sets apart tax cheats who use offshore accounts from other felons is often the large checks they write in back taxes, fines and pen­alties. In Horsky’s case, he’s paying at least $124 million, and could pay more. Prosecu­tors don’t want that to be a get-out-of-jail-free card.
“While the numbers are quite large, they reflect the enormous scope of the crime Horsky committed,” prosecu­tors wrote in a Feb. 6 memo to the judge. “By any terms, even after making those pay­ments, the defendant pos­sesses extraordinary wealth. A sentence of incarceration is necessary in order to dis­pel any indication that one’s freedom can be purchased by paying the government the money it was owed.”

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