Swiss Bank Mirabaud Queried by Senator on Tax Evasion Case
(Bloomberg) -- Swiss bank Mirabaud & Cie. is being asked by a powerful U.S. lawmaker whether it told the Internal Revenue Service about a businessman’s accounts that are now part of America’s biggest individual tax-evasion case.
Senator Ron Wyden, chairman of the Senate Finance Committee, asked in a letter whether Mirabaud told the IRS about the existence of accounts that benefited Robert Brockman, a Houston software tycoon indicted on charges of evading taxes on $2 billion in income over two decades. Swiss prosecutors froze about $950 million in Brockman accounts at Mirabaud after his indictment last October.
“I am deeply concerned by the duration and scale of this alleged tax evasion scheme, particularly the ability to hide billions of dollars offshore from the IRS for such an extended period of time,” including in accounts at the bank, wrote Wyden, an Oregon Democrat, on Wednesday.
In response to the senator, Mirabaud said in a statement that it was unaware of Brockman’s involvement. The U.S. indictment against the billionaire “makes clear that Mr. Brockman went to great lengths to deceive Mirabaud about his real involvement in the accounts held with the bank, none of them were in his name,” the bank said.
Mirabaud wrote that it has “cooperated fully with all requests for information made by the U.S. authorities” and has “fully implemented procedures” to comply with requirements on reporting about U.S. account holders.
Brockman, 80, is accused of using a web of Caribbean entities, as well as Bermudian and Swiss bank accounts, to hide money from the IRS. After he pleaded not guilty, his lawyers said he has dementia and can’t aid in his defense. Prosecutors have accused Brockman of feigning mental decline. A federal judge in Houston will decide whether Brockman is competent to stand trial.
Mirabaud is not charged with wrongdoing in the indictment, which is the largest U.S. tax evasion case ever against an individual.
In 2010, Brockman directed two nominees to open an account at Mirabaud in the name of Point Investments Ltd., a Bermudian entity, according to the indictment. One of the nominees was Evatt Tamine, a lawyer who worked for Brockman and is now cooperating with prosecutors, court records show.
Three weeks later, that account received a $799 million distribution from Vista Equity Partners, where Brockman was the original investor, eventually providing $1 billion in capital, prosecutors said. The Mirabaud account later received transfers in the names of other offshore entities benefiting Brockman that also involved Tamine, according to the indictment.
After Brockman was charged with tax crimes and money laundering, the U.S. filed a forfeiture lawsuit seeking $78 million from Mirabaud. That money was held in an account in the name of Edge Capital Investments, an entity that Tamine set up but that Brockman controlled, according to the forfeiture lawsuit.
“Tamine stated that he intentionally withheld information from Mirabaud Bank in setting up this account,” according to the lawsuit. “Specifically, Tamine excluded the fact that he took direction from Brockman on what would happen with the funds in this account.”
Wyden asked if Mirabaud verified Brockman’s status as a U.S. taxpayer, and if it queried whether he filed reports of foreign bank and financial accounts, required by U.S. law. The letter also poses several questions about Mirabaud’s compliance with the Foreign Account Tax Compliance Act, which requires overseas financial institutions to report assets held by U.S. account holders.
Brockman is the former chief executive officer of Reynolds & Reynolds.
In recent months, Wyden has asked other companies about their role in tax investigations, including Credit Suisse Group AG, Caterpillar Inc. and AbbVie Inc. Wyden is seeking answers from Mirabaud by Oct. 1.
The case is U.S. v. Brockman, 4:21-cr-00009, U.S. District Court, Southern District of Texas (Houston).
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