On May 9, 2016, the Department of Justice (DOJ) announced its first FATCA conviction. It appears to be the beginning of criminal prosecutions by the DOJ against apparent or alleged violations of FATCA reporting requirements. The “Mulholland” case represents the first time that the Government has brought criminal charges based upon alleged violations of FATCA. Mullholland is a dual citizen (US and Canada) (who was indicted and pleaded guilty), that secretly owned an offshore broker-dealer, and an IMC (Investment Management Company) in Panama and Belize. Mulholland played an offshore shell company game, giving him the ability to launder profits back in to the US banking system. His strategy for abusing financial markets attracted the attention of the US Government. The investigation included: US Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HIS), Federal Bureau of Investigations (FBI), Internal Revenue Service – Criminal Investigation (IRS-CI) and the US State Attorney’s Office. In addition to the fraudulent promotion of securities and money laundering, Mulholland also attempted to circumvent IRS reporting requirements under FATCA.
May 2016 JD Supra