Attorney Is Arrested for Alleged Role in Tax Fraud

Attorney Is Arrested for Alleged Role in Tax Fraud
The New York Law Journal by Mark Hamblett  -  May 16, 2012

A British attorney was arrested late on May 10 for allegedly engaging in an 11-year tax fraud scheme to hide over $10 million for an American family. Michael Little, 61, who also has a residence in Long Island City, was taken into custody at John F. Kennedy International Airport and charged with helping members of the Seggerman family park money in Swiss banks and then bring it back into the United States, usually in amounts less than $10,000. One family member, Suzanne Seggerman, pleaded guilty in 2010 to a conspiracy to defraud the Internal Revenue Service and awaits sentencing before Southern District Judge Kevin Duffy.  The family allegedly used code words when communicating about the scheme, with "small" being the word for Little, "beef" the word for money, "lbs" for $1,000, and "FDA" for the IRS. Little, licensed to practice in New York, allegedly advised the family on establishing bank accounts that were nominally controlled by himself or a Swiss lawyer and counseled them to disguise money transfers back to the U.S. as related to the sales of artwork or jewelry.  Little, who made an initial appearance before Southern District Magistrate Judge Frank Maas on May 11, faces a maximum of five years in prison if convicted. Assistant U.S. Attorney Stanley Okula is handling the prosecution in United States v. Little, 12-mj-01241. Little is represented by Benjamin Fischer of Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer.

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Lawyer Little Charged With 11-Year Swiss Tax-Fraud Scheme
Bloomberg by Patricia Hurtado - May 11, 2012

The U.S. charged Michael Little, an attorney, with participating in an 11-year conspiracy that defrauded the Internal Revenue Service using Swiss bank accounts and sham mortgage transactions.  Little and unidentified co-conspirators, including five members of an U.S.-based family, first met at a New York hotel in August 2001, Manhattan U.S. Attorney Preet Bharara said in a criminal complaint filed today.  During the meeting, Little advised family members, identified in court papers as the “S Family,” on how they could bring back to the U.S., without paying taxes, $10 million in overseas accounts that belonged to the family’s recently deceased patriarch.  Little assisted family members with opening an account at UBS AG in Switzerland and conducting sham mortgage transactions designed to get the money into the U.S. without alerting the IRS, the government alleged in the filing in federal court in Manhattan.  From 2001 and 2008 Little met with the matriarch of the family to discuss the transfer of funds and “caused millions of dollars” to be sent from offshore to the U.S. account of an entity she controlled, according to the complaint. The matriarch “made personal and other use of the money,” prosecutors said.  Other unidentified people involved in the scheme include a New Jersey accountant, a lawyer in Switzerland and the eldest member of the S Family, described as a New York businessman who also inherited funds in offshore accounts.  One of the relatives has pleaded guilty to federal charges and is cooperating with the government’s investigation, prosecutors said. Two of that person’s siblings have also provided information to the U.S., prosecutors say.  The case is U.S. v. Little, 12-MAG-1241, U.S. District Court, Southern District of New York (Manhattan).  To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net - To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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British attorney held on $2M bail on NY tax charge
The Associated Press  -  May 11, 2012

NEW YORK — Bail was set at $2 million and home detention with electronic monitoring was ordered Friday for a British attorney arrested and accused of advising the family of a former top Fidelity Investments executive how to dodge U.S. taxes by hiding millions of dollars overseas.  Michael Little, 61, of Hampshire, England, was likely to remain incarcerated overnight after a U.S. magistrate judge in Manhattan ordered bail secured by at least $1 million in cash or property on the charge of conspiracy to commit tax fraud. The German-born Little, who has a residence in Long Island City, was arrested Thursday night as he arrived at Kennedy International Airport on a flight from London, where he lives with his wife and children.  Assistant U.S. Attorney Stanley Okula said Little engaged in a decade-long tax evasion scheme in which he counseled the family of the late Harry Seggerman how to hide at least $10 million overseas. He called the evidence "compelling, strong." Seggerman died in May 2001. He retired as a vice chairman of Fidelity in 1992.  Okula urged a high bail, saying Little was a flight risk because he had substantial money and ties to the United Kingdom, which has been reluctant in the past to extradite to the U.S. individuals charged with tax crimes.  A lawyer for Little said in court that he had been a lawful permanent resident in the United States for 40 years and was licensed to practice as a lawyer in New York, where he has cases pending, including in the courthouse where he sat, his blue shirt dangling over his pants.  Afterward, another defense attorney, Elkan Abramowitz, emailed a statement, saying: "We are studying the charges contained in the complaint. We are confident that in the end we will be able to demonstrate that there is no merit to any of them."  In court papers, the government said Little met with Seggerman's beneficiaries and descendants at a Manhattan hotel in August 2001 and told them that the patriarch had left them about $10 million of a more than $20 million estate in overseas accounts that had never been declared to U.S. taxing authorities.  The government said Little defrauded the Internal Revenue Service by telling family members how to continue hiding those assets by establishing Swiss bank accounts that would be nominally owned or controlled by Little and a Swiss lawyer.  It said he also advised them that they could bring money back to the United States in "little chunks" through traveler's checks or by disguising money transfers to the United States as being related to the sales of artwork or jewelry. The government said he transferred some of the money from Switzerland to London, where Seggerman family members could pick up funds during trips there and bring all or part of the money back to the United States as cash, generally in amounts less than $10,000. To hide communications, members of the Seggerman family used code works in which "small" was used to refer to Michael Little, "beef" meant money, "lbs" meant $1,000 and "FDA" referenced the IRS, the government said. Suzanne Seggerman in December 2010 pleaded guilty to conspiring to defraud U.S. taxing authorities and subscribing to false individual tax returns. Her lawyer, Russell Gioiella, said his client "fully cooperated with the government investigation into the overseas accounts left to the family by her father." IRS Agent Lola Fox said in a criminal complaint that information provided by Suzanne Seggerman had proven to be "highly reliable." She said she also received information from two other members of the Seggerman family, including notes one of them took in various meetings with Little.