Foreign shell companies and overseas bank accounts used to hide income
Los Angeles- Today, in the United States District Court of Los Angeles, Arthur Allen Ferdig, owner of Tradex, a foreign exchange Investment Company, was sentenced to 18 months in Federal prison.
United States District Court Judge Valerie Baker Fairbank sentenced Arthur Allen Ferdig, 71, a former resident of Nassau, Bahamas, to 18 months in prison, followed by three years of supervised release.
On September 28, 2010, Ferdig pleaded guilty to tax evasion for the 2002 year. As part of the plea agreement, Ferdig agreed to, prior to sentencing, sign an agreement with the IRS in which he agreed to pay taxes owed for the year 2002, inclusive of the civil fraud penalty and statutory inertest.
According to the plea agreement, during the 2002 and 2003 year, Ferdig, a U.S. citizen, lived In Jamaica and the Bahamas where he owned and controlled Tradex, a purported foreign exchange investment company based in the Caribbean island of Dominica.
According to court documents, Ferdig admitted that he knowingly received income from Tradex and intentionally failed to report that income by failing to file a U.S. tax return for the year 2002, and directing his income from Tradex to be wired into offshore bank accounts that were held in the names of various shell companies that were under his control, including Industrial Metals and Mining, a mining venture in Nevada, in an attempt to conceal and disguise his receipt and use of income from Tradex. Ferdig admitted, as part of his guilty plea, that his use of overseas bank accounts held in the name of foreign shell companies constituted sophisticated concealment in the commission of his offense in a deliberate attempt to make the offense difficult to detect.
According to court documents, Ferdig admitted that he knowingly and willfully failed to file an income tax return for the 2002 year and failed to report, as income, approximately $529, 000, consisting of $324,000 in investments in Industrial Metals and Mining and $205,000 in payments to an individual, resulting in tax due and owing of approximately $148,000 to the Internal Revenue Service.
“Individuals who intentionally use foreign bank accounts and shell companies to conceal income and assets offshore from the IRS risk criminal prosecution,” said Leslie P. DeMarco, IRS Criminal Investigation Special Agent in Charge of the Los Angeles Field Office. “The prosecution of individuals who intentionally conceal income and evade taxes is a vital element in maintaining public confidence in our tax system. Today’s sentencing of Arthur Allen Ferdig reinforces our commitment to the American public that we will identify and prosecute those who evade their tax obligations.”
The criminal investigation was conducted jointly by IRS – Criminal Investigation and the United States Attorney’s Office.
United States Attorney’s Office Contact: Alka Sagar
Assistant United States Attorney