March 10, 2015
New York Restauranteur Pleads Guilty to Offshore Charge
The owner of Le Perigord, a popular French restaurant in Midtown Manhattan, has pleaded guilty to obstruction charges stemming from undeclared Swiss bank accounts he held from 1992 to 2011.
Georges Briguet, 77, grew up on his family’s vineyard in Switzerland. In 1960, he moved to New York and opened Le Perigord soon after. The restaurant became well known after a photograph of Elizabeth Taylor and Richard Burton dining there was featured on the front page of the New York Post.
In 1992, Briguet opened an account at UBS in Switzerland, with an opening balance of 7,000,000 Swiss Francs. He maintained the account until 2008, when the bank became embroiled in an investigation by U.S. authorities. At that time, he closed his account at UBS and transferred the funds to a numbered account at Clariden Leu, a smaller Swiss bank. Neither of these accounts was ever disclosed on Briguet’s tax retuns, and he did not file FBARs.
As part of its investigation of UBS, the U.S. government received the names and account information for thousands of the bank’s American customers. In 2011, Briguet was civilly audited by the IRS. During an interview with the Revenue Agent conducting the audit, Briguet falsely stated that he had no foreign income or accounts and he signed a written statement to the same effect. Several months later, an IRS Special Agent interviewed Briguet as part of a criminal investigation involving his foreign accounts. Again, Briguet denied having any foreign income or accounts. Briguet ultimately pleaded guilty to corruptly endeavoring to obstruct and impede the Internal Revenue laws, under what is known as the Title 26 Omnibus Clause.
It is unusual to see criminal prosecution in a case where an immigrant held accounts in the country where he is from. It is natural for immigrants to maintain ties with their home countries, where they might still have extended family. In this case, however, the accounts were opened more than thirty years after moving to the United States. The fact that Briguet closed the account at UBS when the bank came under investigation and moved the funds to a different Swiss account is also indicative of willfulness. Still, Briguet may have avoided criminal prosecution if he had not made false statements during the course of his civil audit.
Briguet faces a maximum sentence of three years and a fine of $250,000. As part of the plea agreement, he has agreed to pay restitution to the IRS in the amount of $169,935, which represents the tax loss to the government. While restitution is usually not ordered for Title 26 offenses, it can be agreed to as part of a plea agreement. It is expected that the IRS will also assess civil FBAR penalties against Briguet, which could be as much as 50% of the account value on a per-year basis.