Virginia Doctor Pleads Guilty to Conspiracy Involving Undeclared Swiss Bank Account

February 16, 2010 - Dr. Andrew Silva of Sterling, Va., pleaded guilty today to conspiracy to impede the United States and to making a false statement, the Justice Department, Immigration and Customs Enforcement (ICE), U.S. Postal Inspection Service (USPIS) and the Internal Revenue Service (IRS) announced. Sentencing has been set for May 7, 2010, before U.S. District Judge Liam O’Grady. The defendant remains free on a $50,000 bail pending sentencing. He faces a maximum sentence of ten years in prison and a maximum fine of $500,000.

According to court documents, in 1997, Silva inherited an undeclared bank account from his mother at the Zurich, Switzerland, branch of one of the world’s largest international banks. The bank is headquartered in England and also has offices in Zurich, Geneva, and the Eastern District of Virginia . The account was held in the name of a sham Liechtenstein trust. In 1999, Silva met with an attorney who managed the account in Zurich, Switzerland. The Zurich attorney instructed Silva to keep the account “hush,” to not keep any records relating to the account, and to send coded letters if he wished to meet with the attorney. Further, the Zurich attorney advised Silva that if he transported or mailed less than $10,000 in U.S. currency back to the United States, he would not have to declare the funds to the U.S. government upon re-entry to the United States.

According to court documents, in September 2009, Silva was informed that the international bank was closing his undeclared Swiss account and that he had until the end of the year to travel to Switzerland to withdraw all funds. He made two trips to Zurich in October and November 2009 and met with the Zurich attorney at his office and a Swiss banker at the private wealth office of the international bank. The Zurich attorney and the Swiss banker refused to wire the money to the United States as it would leave a trail for U.S. law enforcement. Instead, they provided him with $235,000 in U.S. currency. Of that total, Silva received $200,000 in two individually wrapped “bricks” of $100,000 of sequentially numbered, new $100 bills.

According to court documents, with the assistance of the Zurich attorney, Silva mailed 26 packages containing over $200,000 in U.S. currency from Switzerland to the United States to himself and another person.

According to court documents, Silva admitted that on Nov. 23, 2009, upon his return to the United States, he falsely informed a U.S. Customs Inspector at Dulles International Airport that he had traveled to Switzerland to purchase diamonds. Further, he falsely stated to a U.S. Customs Inspector that he had not recently mailed any U.S. currency from Switzerland into the United States.

According to court documents, for the years 1997 through 2008, Silva made and subscribed false U.S. Individual Income Tax Returns, Forms 1040, that failed to report on the Schedules B attached to the returns that he had an interest in a financial account in a foreign country. Additionally, Silva failed to report the income he earned on his undeclared Swiss account on his tax returns.

According to court documents, from 1997 through 2008, Andrew Silva failed to file with the Department of the Treasury a Report of Foreign Bank and Financial Accounts on Form TD F 90-22.1 (FBAR) reporting his interest in his undeclared Swiss account that had an aggregate value of more than $10,000 at any time during a particular year.

As part of his plea agreement, Silva agreed to forfeit to the government $211,200 in U.S. currency that law enforcement officials seized from packages that Silva mailed from Switzerland to Silva’s residence in Sterling, Va.

“Today’s plea shows the continued efforts of the Justice Department to investigate and prosecute those citizens who use offshore accounts to hide income and assets,” said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. “American taxpayers should rest assured that those who do not file accurate tax returns and who utilize offshore accounts to hide money will be investigated, and when appropriate, prosecuted and sent to jail.”

“We are capable of thwarting offshore banking schemes because of the increased cooperation among ICE, Postal Service, and the IRS,” said Neil H. MacBride, U.S. Attorney for the Eastern District of Virginia. “The tax charges in this case came to light because agents caught Mr. Silva structuring cash to avoid reporting requirements, and that kind of coordination is making it possible for us to discover Americans who conceal their wealth overseas and make them pay for their actions.”

“Failing to report the transportation of more than $10,000 into or out of the United States is smuggling,” said Scot R. Rittenberg, Deputy Special Agent in Charge for U.S. Immigration and Customs Enforcement (ICE) in Washington, D.C. “ICE continues to work closely with it federal partners to ensure smugglers are held accountable for their crimes.”

“The U.S. Postal Inspection Service is dedicated to ensuring those that use the U.S. Postal Service to commit crimes are prosecuted to the fullest extent of the law,” said Daniel S. Cortez, Postal Inspector in Charge of the Washington Division. “We have Postal Inspectors throughout the country who work tirelessly to ensure the mail isn’t used to facilitate criminal activity.”

“At this time of year, when hard-working citizens are sitting down to prepare their tax returns, it is especially disappointing to see the overt steps some individuals will take to hide their taxable funds from the government," said IRS Criminal Investigation Chief Victor S. O. Song. "We are determined at the IRS and Department of Justice to halt international tax evasion, and the facts outlined in today's plea are strong indicators that we can and will find this fraudulent activity."

Acting Assistant Attorney General John A. DiCicco commended the criminal agents from ICE, USPIS, and IRS who investigated the case, as well as Assistant U.S. Attorney Gordon Kromberg, Tax Division Senior Litigation Counsel Kevin M. Downing, and Tax Division Trial Attorneys Mark F. Daly and John E. Sullivan, who are prosecuting the case.

United States citizens and residents have an obligation to report to the Internal Revenue Service on the Schedule B of a U.S. Individual Income Tax Return, Form 1040, whether that individual had a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. United States citizens and residents have an obligation to report all income earned from foreign bank accounts on the tax return.

United States citizens and residents who had a financial interest in, or signature authority over, a financial account in a foreign country with an aggregate value of more than $10,000 at any time during a particular year were required to file with the Department of the Treasury a FBAR. The FBAR for the applicable year is due by June 30 of the following year.

Individuals who physically transport, mail or ship, or cause to be physically transported, mailed, shipped or received, currency, traveler’s checks, and certain other monetary instruments in an aggregate amount exceeding $10,000 into the United States are required to file a FinCen Form 105, Report of International Transportation of Currency or Monetary Instruments, with the Bureau of Customs and Border Protection (the CMIR).

United States law prohibits individuals from structuring mailings of U.S. currency into the United States in amounts less than $10,000 if the purpose of the structuring was to evade the requirement to file a CMIR.