Saturday, May 12, 2012

Family Told How to Hide Inheritance, U.S. Claim


Harry G.A. Seggerman

The meeting of the Seggerman family at the elegant Four Seasons Hotel in New York in August 2001 was like many such gatherings of bereaved families: a patriarch had died and the children had come to discuss their inheritances.
In this case, the patriarch was Harry G. A. Seggerman, a respected investment fund president who had died several months earlier at age 73, leaving his family more than $20 million, the government said.
But the meeting that day, attended by Mr. Seggerman’s widow and four of his children, took an unusual turn, federal prosecutors in Manhattan said on Friday.
The family’s lawyer, Michael Little, who was also present, explained that half of Mr. Seggerman’s estate, more than $10 million, was in Swiss and other foreign accounts, and he told them how they might keep the money hidden to avoid paying United States taxes, prosecutors said.
The result was the hatching of a protracted tax fraud scheme involving Mr. Little and various family members, federal prosecutors said. One of Mr. Seggerman’s daughters has already pleaded guilty in Federal District Court in Manhattan, and on Thursday night, the lawyer, Mr. Little, was arrested on a conspiracy charge at Kennedy International Airport as he arrived from London.
Mr. Little, 61, who has residences in Hampshire, England, and in New York, would face a maximum of five years in prison if convicted. On Friday, a federal magistrate judge said he could be released on a $2 million personal recognizance bond.
Mr. Little’s lawyer, Elkan Abramowitz, said “we are confident that in the end we will be able to demonstrate that there is no merit” to the charges, according to The Associated Press.Preet Bharara, the United States attorney in Manhattan, said on Friday that his office was prosecuting not only people who do not pay their taxes, but also “their enablers.”
“In addition to breaking the law by advising his American clients on how to break it themselves, Michael Little violated the most basic moral and ethical tenets of the legal profession,” Mr. Bharara said.
A federal complaint unsealed on Friday charged that Mr. Little had told family members how they could set up Swiss accounts and other entities with him and a Swiss lawyer, who would be paid annual fees for their services. He also explained how the family could bring money back to the United States in small increments using, for example, traveler’s checks.
Mr. Seggerman’s eldest son, a businessman who worked at his father’s firm, also once proposed that his siblings use code words when discussing the plan, the complaint said.
They would use the word “beef” when referring to money, “F.D.A.” for the I.R.S., and “refrigerator” for certain accounts in which money would be held, the complaint said.
Mr. Seggerman’s son Henry, who is listed on the Web site of the firm, International Investment Advisors, did not respond to a request for comment.
A grand jury investigation into the family’s handling of its inheritance is continuing, the government said, and it has focused on foreign advisers to the family, as well as the Swiss lawyer and a New Jersey accountant.
Two of Mr. Seggerman’s other children, who are not identified in the complaint, have provided information to prosecutors in hopes of entering into cooperation agreements.
One, a daughter, took extensive notes at the Four Seasons meeting on hotel stationery, which she turned over to investigators, prosecutors said.
Another daughter, Suzanne Seggerman, pleaded guilty in 2010 to conspiracy and tax charges, and is awaiting sentencing. She has become a cooperating witness in the investigation, the complaint said.
Her lawyer, Russell M. Gioiella, said on Friday that his client had “cooperated fully” in the case. “She sincerely regrets that she did not disclose the existence of these accounts from the outset,” he added.
Colin Moynihan contributed reporting.

Lawyer Little Charged With 11-Year Swiss Tax-Fraud Scheme

The U.S. charged Michael Little, an attorney, with participating in an 11-year conspiracy that defrauded the Internal Revenue Service using Swiss bank accounts and sham mortgage transactions.
Little and unidentified co-conspirators, including five members of an U.S.-based family, first met at a New York hotel in August 2001, Manhattan U.S. Attorney Preet Bharara said in a criminal complaint filed today.
During the meeting, Little advised family members, identified in court papers as the “S Family,” on how they could bring back to the U.S., without paying taxes, $10 million in overseas accounts that belonged to the family’s recently deceased patriarch.
Little assisted family members with opening an account at UBS AG in Switzerland and conducting sham mortgage transactions designed to get the money into the U.S. without alerting the IRS, the government alleged in the filing in federal court in Manhattan.
From 2001 and 2008 Little met with the matriarch of the family to discuss the transfer of funds and “caused millions of dollars” to be sent from offshore to the U.S. account of an entity she controlled, according to the complaint. The matriarch “made personal and other use of the money,” prosecutors said.
Other unidentified people involved in the scheme include a New Jersey accountant, a lawyer in Switzerland and the eldest member of the S Family, described as a New York businessman who also inherited funds in offshore accounts.
One of the relatives has pleaded guilty to federal charges and is cooperating with the government’s investigation, prosecutors said. Two of that person’s siblings have also provided information to the U.S., prosecutors say.
The case is U.S. v. Little, 12-MAG-1241, U.S. District Court, Southern District of New York (Manhattan).
To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

British Lawyer Charged in Swiss Bank Mess Related to UBS Account (5/11/12)


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