Geneva independent asset manager Prime Partners has agreed to pay $5 million to the United States to settle charges for tax evasion and assisting US taxpayers in setting up undeclared foreign bank accounts.
According to the US Department of Justice announcement on August 15, the group received a non-prosecution agreement and revealed 175 client files of non-compliant US taxpayer clients from 2001 to 2010.
The agreement was reached following the ‘extraordinary cooperation’ of the Geneva firm and means it will not be criminally prosecuted.
In early 2009, Prime Partners voluntarily implemented remedial measures to stop assisting the US taxpayers in evading taxes.
As part of the settlement, Prime Partners forfeited $4.32 million, accounting for the fees it earned by assisting the tax evasion and will pay $680,000 in restitution to the IRS, which represents the unpaid tax evaded by the clients.
Speaking of Prime Partners, Joon H Kim, acting Manhattan US Attorney, said: ‘They created sham entities and even counselled their clients to use pay phones and prepaid debit cards to avoid detection of their tax fraud scheme.'
The independent asset manager admitted to its wrongful conduct in that it created entities with no business purpose, advised the US taxpayer clients to destroy any faxes they received from the Geneva group and facilitated cash transfers in the US between US taxpayer clients with undeclared accounts.
Kim added: ‘The resolution of this matter through a non-prosecution agreement, along with forfeiture and restitution, reflects the extraordinary cooperation provided by Prime Partners to our investigation.’
Following the settlement, Prime Partners must continue to cooperate with the US for at least three years.
Speaking of the case, Kim said: ‘It should serve as proof that cooperation has tangible benefits. We will continue to pursue financial services firms around the world that help their clients evade U.S. taxes.’