|
|
|
||
|
|
|
|
January 17, 2003 The United States Attorney's Office for the Northern District of California announced that Eric Witmeyer, a Los Angeles attorney, pled guilty today to conspiracy to defraud the Internal Revenue Service in violation of 18 U.S.C. § 371. Eric Witmeyer and his co-defendant Jerome Schneider were indicted by a Federal Grand Jury in San Francisco on December 19, 2002. They were charged with conspiracy and 22 counts of mail and wire fraud in connection with the marketing and sales to U.S. taxpayer investors of offshore international banks or corporations and causing those entities to be decontrolled which is a process used by the defendants to attempt to conceal the U.S. taxpayer's investor's ownership in the offshore bank or corporation. Under the plea agreement, Eric Witmeyer pled guilty to the conspiracy count. In pleading guilty, Eric Witmeyer admitted that he and co-defendant Jerome Schneider conspired to defraud the United States by attempting to defeat and obstruct the lawful functions of the IRS in the ascertainment, computation, assessment and collection of income taxes owed by U.S. taxpayers. According to Mr. Witmeyer's plea agreement, Mr. Schneider marketed and sold to U.S. taxpayer investors offshore entities such as those licensed by the Island of Nauru as international banks and other offshore corporations. Mr. Schneider allegedly represented to U.S. taxpayers that by means of their ownership of the offshore entities, and so-called decontrol documents to be prepared by Mr. Witmeyer, or other counsel, the U.S. taxpayers could conceal from the Internal Revenue Service, their ownership and control of funds or assets they caused to be deposited into bank or brokerage accounts held in the name of the offshore banks in financial institutions located outside the United States. Mr. Witmeyer, further admitted that, at Mr. Schneider's direction and request and based upon documents supplied to him by Mr. Schneider, Mr. Witmeyer agreed to act as counsel for the U.S. taxpayers and prepare the so-called decontrol documents for the U.S. taxpayers who purchased an offshore entity from Mr. Schneider. The decontrol process included transferring the U.S. taxpayer's interest in the offshore entity to a so-called Independent Foreign Owner ("IFO") in exchange for a promissory note in an amount large enough to make it appear as if there was bona fide and negotiated sale of the offshore entity to the IFO. The amount of the promissory note was not the result of negotiations between U.S. taxpayers and the IFO. Rather, it was an amount set by Mr. Witmeyer and/or allegedly Mr. Schneider in discussions with the U.S. taxpayers. Mr. Schneider allegedly selected the IFO for the U.S. taxpayers and despite the purported decontrol of the offshore entity, Mr. Witmeyer understood that the U.S. taxpayers in fact owned and controlled the offshore entity and any accounts opened up in the name of the offshore entity in any financial institution located outside the United States. According to Mr. Witmeyer's plea agreement, he and Mr. Schneider used financial institutions and entities located outside the United States to conceal the activities of the offshore entities from the Internal Revenue Service. The sentencing of Eric Witmeyer is scheduled for June 13, 2003 before Judge Susan Illston in San Francisco. The maximum statutory penalty for the conspiracy count in violation of 18 U.S.C. § 371 is 5 years and a fine of $250,000. However, the actual sentence is dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and will be imposed in the discretion of the Court. The prosecution is the result of an investigation by agents of the IRS, Criminal Investigation division. Jay R. Weill is the Assistant U.S. Attorney who prosecuted the case. A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can. Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on http://pacer.cand.uscourts/gov. The IRS maintains a website which contains a warning notice to the public concerning potential abusive tax programs: http://www.treas.gov/irs/ci. All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415)436-7181.
|
||
