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country, and this is likely the result of addressing similar indictment charging the filing of false U.S. tax returns and
compliance threats across J5 countries. false statements with respect to his renunciation of U.S.
The J5 is also targeting “virtual currency crimes,” an citizenship days after an IPO of a branchless online bank
emerging compliance threat that has been discussed by the in which Mr. Tinkov allegedly held beneficial ownership of
Commissioner and many executives within the criminal and more than $1,000,000,000. In June 2020, David Smith,
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civil operating divisions of the IRS over the past year. IRS an attorney with Ernst & Young charged with tax evasion
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public successes are few and far between at this point, but past and extradited from Canada, was sentenced to 36 months
history would indicate it would be a mistake to underestimate in prison and $7,800,000 in restitution to the IRS. 20
the IRS’s efforts at rooting out this area of noncompliance. Finally, U.S. taxpayers who seek to conceal assets and
The involvement of the J5 in prioritizing virtual currency income outside the United States and evade their U.S. tax
signals the international scope of this issue. The high-profile obligations continue to find themselves at the tip of the
attention that cryptocurrencies are receiving, the rapid rise of spear. In March 2020, Scott Butler pled guilty to tax evasion
cryptocurrency values, the placement of the “cryptocurrency based on his formation of several Nevada nominee corpora-
question” on the 2019 Form 1040, all telegraph increased tions to receive his income, movement of funds to accounts
focus on the international stage in the years to come. in Switzerland, and the use of insurance wrappers to conceal
On January 23, 2020, the J5 coordinated a full day of his beneficial ownership. In April 2020, Dusko Bruer pled
enforcement, including search warrants, interviews, and guilty to tax evasion and failure to file a Report of Foreign
subpoenas, into the suspected facilitation of offshore tax Bank and Financial Account, admitting to using millions
evasion across the United Kingdom, United States, Canada, from his international company to pay personal expenses,
Australia, and the Netherlands. The cross-border investiga- including the purchase of domestic and foreign real estate
tion focuses on an international financial institution located and luxury items, and maintaining financial accounts in
in Central America alleged to be facilitating money laun- Croatia, Germany, Serbia, and Switzerland. Practitioners are
dering and tax evasion by assisting clients around the world watching these cases closely, waiting to see if the sentences
to conceal and transfer wealth anonymously to evade tax imposed send a strong message of deterrence.
obligations and launder criminal proceeds. “It is expected In October 2020, the Justice Department announced
that further criminal, civil and regulatory action will arise two of the largest individual international matters in the
from these actions in each country.” 17 history of the international tax enforcement. On October
The most notable U.S. international criminal tax cases 15, 2020, the Department disclosed a 39-count indict-
include the prosecutions and guilty pleas of Credit Suisse ment charging Robert T. Brockman with tax evasion, wire
and Wegelin Bank, the deferred prosecutions of UBS, fraud, money laundering, and other offenses. The charges
Bank Leumi, Bank Julius Baer, Mizrahi-Tefahot Bank Ltd., stem from an alleged decades-long scheme to conceal
HSBC Private Bank (Switzerland), and Bank Hapoalim, approximately $2B in income from the IRS. That same
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and the nonprosecution agreements with more than 80 day, a nonprosecution agreement with Robert Smith was
international financial institutions, including Zurich Life announced by the DOJ for his involvement from 2000
Insurance Company (Switzerland) and Zurich Life Insurance through 2015 in an illegal scheme to conceal income and
Ltd. (Isle of Man), and LLB Verwaltung (Switzerland) AG, evade millions in taxes by using an offshore trust structure
which required cooperation in any related civil or criminal and offshore bank accounts. 22
proceedings involving and payment of a criminal penalty A review of the global landscape reveals that international
of more than $10,600,000. In addition, the United States criminal tax enforcement is not limited to the United States
continues to prosecute professional enablers, without whom or members of the J5. For example, in December 2016,
individuals and entities would be hard-pressed to successfully France enacted Law No. 2016-1691, Transparency, Fighting
evade tax and reporting obligations. Corruption and Modernising Economic Life (“Sapin
In September 2020, Richard Gaffey, a U.S.-based II”). Sapin II authorized deferred prosecution agreements
accountant and tax advisor in Boston, Massachusetts, was (“CJIP”), under which entities can avoid criminal proceed-
sentenced to 39 months in prison after pleading guilty to ings and the admission of guilt in return for the payment of
conspiring with others to defraud the United States by penalties, up to 30 percent of the three-year average annual
concealing assets, investments, and income through the revenues, and submission to an anticorruption compliance
use of offshore shell companies and nominees in an effort program under the supervision of a monitor. Executed
to evade tax and reporting obligations. In March 2020, agreements are published on the website of the French
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Oleg Tinkov, the founder of a Russian bank, was arrested Anticorruption Agency (Agence française anticorruption).
in London in connection with a September 2019 sealed The agreements do not prevent the opening of criminal

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