March 10, 2015
UBS Client Sentenced
A former UBS client has been sentenced to four months of incarceration and two years of supervised released by a federal court in Georgia. The internet entrepreneur was convicted of FBAR violations, stemming from his undeclared offshore accounts in Switzerland and other countries.
Gregg Kaminsky, the founder and CEO of Circlenet LLC, controlled accounts at UBS from 2000 to 2008. He caused his income from at least two U.S. companies to be paid directly to this Swiss account, so that he could avoid being taxed on it. From time to time, he transferred funds from this account to other offshore accounts in Thailand and Hong Kong.
In addition to hiding his accounts from the IRS, Kaminsky failed to disclose his UBS account when he applied for federal aid to attend an Executive MBA program at Emory University in 2007 and 2008. Had he disclosed his ownership of the account, he would have been ineligible to receive the needs-based aid.
In 2010, Kaminsky attempted what is referred to as a “quiet disclosure,” where a taxpayer files amended tax returns and delinquent FBARs without participating in the voluntary disclosure program. He was ineligible to make a voluntary disclosure, because UBS had already turned over information pertaining to its American account-holders to U.S. authorities.
Though the sentencing guidelines range was 15-21 months, Kaminsky’s attorneys asked the judge to consider a sentence of probation. Prosecutors, however, insisted on a sentence of incarceration. While his sentence of four months is less than the guidelines range, Kaminsky was also required to pay a civil FBAR penalty of $250,635, in addition to the taxes that he owed.