Florida Man Pleads Guilty In Manhattan Federal Court To Concealing A Bank Account In Liechtenstein Worth More Than $1 Million

Preet Bharara, the United States Attorney for the Southern District of New York, announced that HARRY FALTERBAUER pled guilty today to willfully failing to file a Report of Foreign Bank and Financial Accounts (“FBAR”) with the IRS regarding a secret offshore bank account he maintained and controlled.  FALTERBAUER, a United States citizen and resident of Florida, maintained the undeclared account at a bank in Liechtenstein from approximately 1988 to 2008.  During that time, the account reached a high balance of more than $1.5 million.  FALTERBAUER, who was arrested in July 2015, entered his guilty plea before U.S. District Judge Jesse M. Furman.

Manhattan U.S. Attorney Preet Bharara said: “As he admitted, Harry Falterbauer tried to conceal his million-dollar offshore bank account from U.S. authorities.  Today’s plea is a reminder that we continue to work with the IRS to investigate and prosecute taxpayers who seek to use bank-secrecy laws abroad to avoid legal obligations in the U.S.”

According to the Indictment previously filed in Manhattan federal court and statements made in court in connection with FALTERBAUER’s guilty plea:

FALTERBAUER opened an account at Liechtensteinische Landesbank AG, a bank based in Vaduz, Liechtenstein (“LLB-Vaduz”), in the late 1980s.  Although FALTERBAUER opened the account in his own name, the bank referred to the account exclusively by its number in order to conceal the connection to FALTERBAUER.  In an affidavit provided to the bank in 2003, FALTERBAUER declared that he was a U.S. citizen and that he was not authorizing LLB-Vaduz to disclose his name to U.S. tax authorities.

The account generated capital gains and losses from investments, reaching a high balance of more than $1.5 million in approximately 2007.  It had a balance of more than $1.1 million before its closure in 2008.

For the calendar year 2008, FALTERBAUER willfully failed to disclose on his tax returns both his interest in the LLB-Vaduz account and the income that account generated.  For the same year, FALTERBAUER also willfully failed to file an FBAR with the IRS, as the law required him to do.

Liechtenstein amended its laws in 2012 to permit banks to produce documents relating to certain U.S. taxpayers to the Department of Justice.  LLB-Vaduz subsequently provided files from undeclared accounts, including FALTERBAUER’s, to this Office.

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FALTERBAUER, 60, faces a maximum sentence of five years in prison.  As part of his plea agreement, FALTERBAUER has agreed to pay a civil penalty of $794,500, file amended tax returns, and pay back taxes of at least $15,013.  He is scheduled to be sentenced by Judge Furman on February 24, 2016 at 4 p.m.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the outstanding investigative work of IRS-CI.  Mr. Bharara also thanked the U.S. Department of Justice’s Tax Division for its assistance.

The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Sarah Paul and David Abramowicz are in charge of the prosecution.