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April 4, 2008
Tax Cheat Worth $1.8 Billion Evades $52 Million in Taxes, Gets Probation and $3,500 Fine
Doug Berman (Ohio State) of our sister Sentencing Law & Policy blogs Feds Agree to Probation for Tax Cheat Billionaire!?!?!:
After seeing this story at Forbes, headlined "U.S. Agrees Guilty Billionaire Shouldn't Go to Jail," I may have to rethink my assumption that federal prosecutors never are willing to go soft on any white-collar criminals. Here are the details:
In his plea agreement, [Igor] Olenicoff, 65, admitted he lied on his 1998 through 2004 tax returns when he answered "no" to a question asking if he had ownership or authority over any financial accounts in foreign countries. In fact, he had accounts in the Bahamas, Switzerland, Liechtenstein and Britain. As part of the plea deal, Olenicoff paid $52 million in back federal taxes, interest and civil fraud penalties and agreed to bring all the money in his foreign accounts (believed to total in the hundreds of millions) back to the U.S.
Forbes estimates the self-made, Russian-born Olenicoff, who came to the U.S. at age 15, is now worth $1.6 billion. While the false-tax-return charge is punishable by up to three years in jail, Olenicoff's deal with prosecutors, together with federal sentencing guidelines, made it unlikely he would get more than six months. Then last month, a U.S. probation officer filed a pre-sentencing report recommending Olenicoff get off with just one year of probation and a $3,500 criminal fine.
April 4, 2008 in New Cases | Permalink
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Tracked on Apr 4, 2008 9:17:29 AM
Comments
I am a little confused by this story. Did the government agree, as part of the defendant's plea, to agree to whatever recommendation the probation officer recommended in the PSR? If not, the government could still ask for a stiffer sentence and penalty at sentencing.
And, as a technical point, the defendant did not "evade" taxes--he ATTEMPTED to evade them. The only way to evade taxes is to not get caught.
As the defendant plead guilty and paid the taxes, penalties (including the 75% fraud penalty), and interest owed, I think he likely will get a downward departure for acceptance of responsibility. It will be interesting to see what the Judge sentences him to (as well as what the government recommends at sentencing). If they want to set an example, perhaps the example they want to set is that if you accept responsibility and pay what you owe then you have been sufficiently punished?
Posted by: Adjunct Law Prof. | Apr 4, 2008 8:12:48 AM
This guy is a billionaire; he can afford a stinking federal prosecutor!
Posted by: Richard | Apr 4, 2008 1:10:09 PM
The little people would have the key thrown away and everything they own confiscated without mercy.
Posted by: bonanzaman | Apr 4, 2008 1:17:44 PM
Gee, do you think the "russian" might have threatened to run to Israel if he was NOT let off?
Posted by: William | Apr 4, 2008 2:01:50 PM
I have seen other commentary on TaxProf Blog where I just wanted to puke because these academias suck the life blood of this country off of dumb little people with their superior knowledge. Now we have a dirt bag that will not be spending time in jail, LIKE the Browns, and will not receive harsh EQUAL treatment. What's the difference folks ?
Posted by: Tim | Apr 4, 2008 3:46:59 PM
Tim:
The Browns locked themselves in a compound, armed themselves, and threatened violence anyone who tried to come on to their property. There were booby traps and a cache of weapons found on the Browns' compound. The Browns did not accept responsibility for their actions nor did they acknowledge the rule of law--they protested the tax code with frivolous arguments universally rejected by the courts.
Igor has not been sentenced yet, so give the judge a chance. But Igor has paid what the government says he owed--MAJOR difference from the Browns in that (1) he acknowledges the rule of law and (2) paid what he owed plus penalties and interest.
I hope that the judges impose jail sentences in both this case and the Snipes case as they are high profile and send a message to the public that tax cheats suffer consequences. The only reason the Browns got any attention was that they courted the media, threatened violence, and had a Waco-like standoff. There are plenty of other "regular Joes" out there that cheat on their taxes and go to jail. Check out DoJ's own website for a list of the not-as-popular new residents of the Federal Bureau of Prisons.
http://www.usdoj.gov/tax/taxpress2008.htm
Hopefully judges imposing sentences in tax cases will take a lesson from Gilbert & Sullivan:
"A more humane Mikado never
Did in Japan exist,
To nobody second,
I'm certainly reckoned
A true philanthropist.
It is my very humane endeavour
To make, to some extent,
Each evil liver
A running river
Of harmless merriment.
My object all sublime
I shall achieve in time —
To let the punishment fit the crime —
The punishment fit the crime;
And make each prisoner pent
Unwillingly represent
A source of innocent merriment!
Of innocent merriment!"
Posted by: Adjunct Law Prof. | Apr 4, 2008 5:52:59 PM
Why should he pay taxes on overseas earnings? Most other countries don't tax that. He should pay taxes on what he earned here and and only here to offset the benefits the government provides those who live here. it' his money, not the governments or that of the envious parasites who posted earlier. The real criminal here is the government who stole his money, not the other way around.
Posted by: cubanbob | Apr 5, 2008 2:24:25 AM
As to the previous comment concerning the Brown's, please get your facts straight. The Brown's were willing to accept responsibility, and the prosecution refused to show them the law requiring compliance. They had no choice but to stand up for their rights, and were railroaded as a result by a kangaroo court. Have you seen the law requiring you to pay federal income tax?
Posted by: Vince | Apr 5, 2008 3:23:05 AM
Paul: props to you. Even the tax protesters are reading your blog. You span the globe to bring us a constant variety of readers and posters… the thrill of academia… and the agony of protesters… the human drama of U.S. and international tax law… this is Paul Caron's TaxProf Blog!
Vince:
And as for crimes, just because no one showed you the law that makes it illegal to murder people does not make you are free to murder people. Just because no one showed you the law that makes it illegal to steal does not mean you can go on a crime spree.
I know this is futile, but yeah I have see the law: It is called the Internal Revenue Code (a.k.a. Title 26 United States Code).
There is no point in debating someone who is unwilling to accept the provisions of the Internal Revenue Code. (For example: "§ 61. Gross income defined (a) General definition. Except as otherwise provided in this subtitle, gross income means all income from whatever source derived"
"§ 6011. General requirement of return, statement, or list (a) General rule When required by regulations prescribed by the Secretary any person made liable for any tax imposed by this title, or with respect to the collection thereof, shall make a return or statement according to the forms and regulations prescribed by the Secretary. Every person required to make a return or statement shall include therein the information required by such forms or regulations."
"§ 6012. Persons required to make returns of income (a) General rule Returns with respect to income taxes under subtitle A shall be made by the following: (1) (A) Every individual having for the taxable year gross income which equals or exceeds the exemption amount"
etc. etc. etc.
And in case you haven't read it, see:
See http://www.irs.gov/pub/irs-utl/friv_tax.pdf
-ATP
Posted by: Adjunct Law Prof. | Apr 5, 2008 8:55:02 PM
