Source: https://www.justice.gov/opa/pr/film-producer-indicted-multi-decade-tax-conspiracy
Defendant Allegedly Concealed More than $25M Abroad, Causing More than $5M in Loss to IRS
A film producer and an Australian accountant were indicted by a federal grand jury yesterday for crimes related to their roles in a multi-decade conspiracy to defraud the United States by concealing the movie producer’s income and assets offshore.
According to the indictment, Nigel Sinclair is a film producer who founded several successful movie production companies and Anthony Stewart is an accountant in Australia. In 2000, Sinclair allegedly co-owned Intermedia, a film production company he co-founded. He allegedly held half of his Intermedia shares in the name of a Maltese nominee entity that he controlled. When the company was listed on a foreign stock exchange, Sinclair allegedly caused his shares held by the Maltese company to be sold for approximately $25 million. He and Stewart then conspired with others to conceal these proceeds by depositing them into nominee bank accounts in Switzerland. Over the years, Sinclair allegedly used these proceeds to fly on private jets, purchase an $800,000 guitar owned by a famous rock musician, fund his next production company and build himself an 8,000 square foot vacation home in the Jackson Hole area of Wyoming. Stewart and others, among other things, allegedly used corporate entities and created fake documents to disguise the true ownership and source of the funds Sinclair used to do so.
In 2004, one of Sinclair’s co-conspirators was allegedly arrested in Australia and his laptop seized. The laptop allegedly contained files related to Sinclair and other individuals’ offshore financial dealings. According to the indictment, the seizure of the laptop was the impetus for a significant tax evasion investigation in Australia, code-named Project Wickenby. As the investigation progressed, and concerned about a possible IRS inquiry as well, Sinclair, Stewart and their co-conspirators allegedly took steps to avoid detection by authorities, including by moving Sinclair’s assets into the name of new nominees, destroying potentially incriminating documents by flushing them down the toilet, talking in code and communicating on burner phones.
In 2015, Sinclair allegedly tried to use the IRS’ Streamlined Domestic Offshore Procedures. Under those procedures, the IRS allegedly offered taxpayers with undisclosed foreign assets the opportunity to make timely, accurate and complete disclosures to resolve their non-compliance and limit their criminal exposure. Allegedly, a taxpayer who certified under penalties of perjury that their failure to comply was non-willful — usually defined as the result of negligence or mistake — could pay significantly reduced penalties. In his disclosure Sinclair allegedly made several false statements about his foreign assets and underreported their value. In addition, despite admitting in his 2015 voluntary disclosure that he had a foreign bank account, Sinclair allegedly did not report that bank account on Reports of Foreign Bank Account and Financial Accounts (FBARs) that he filed with the U.S. Treasury Department for 2016 or 2017.
Lastly, in 2020, Sinclair allegedly encouraged one of his co-conspirators to tell a false narrative to U.S. authorities as part of a grand jury investigation.
Sinclair allegedly caused a tax loss to the IRS of more than $5 million.
Sinclair and Stewart were charged with conspiracy to defraud the United States. Sinclair was also charged with filing false tax returns, filing false FBARs and obstruction of justice. If convicted, Sinclair and Stewart face a maximum penalty of five years in prison for conspiracy. Sinclair also faces a maximum penalty of three years in prison for each filing a false tax return charge, a maximum penalty of five years in prison for each false FBAR charge and a maximum penalty of 20 years in prison for the obstruction charge.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS Criminal Investigation is investigating the case. Assistance was provided by the Joint Chiefs of Global Tax Enforcement (J5), which brings together the taxing authorities of Australia, Canada, the Netherlands, United Kingdom and United States.
Trial Attorneys Peter J. Anthony and Erika V. Suhr and Assistant Chief Matthew Kluge of the Tax Division are prosecuting the case. Former Trial Attorney Christopher M. Magnani assisted in the investigation.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Sinclair Indictment.pdfUpdated September 13, 2024
