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Credit Suisse client in tax dodge case gets $15-million bail

Credit Suisse client in tax dodge case gets $15-million bail
A sign above the entrance to the Credit Suisse Group AG headquarters in Zurich, Switzerland, on Tuesday, March 21, 2023.

A Brazilian-American businessman charged with dodging US taxes for decades using accounts at Swiss banks including Credit Suisse Group AG was granted a $15-million bail package on Tuesday.

Dan Rotta, 77, who was arrested 9 March at Miami International Airport as he prepared to fly to Barcelona, must remain under house arrest with electronic monitoring, a federal judge in Miami ruled. Prosecutors had sought to keep Rotta locked up, arguing he’s lied to the Internal Revenue Service for 35 years and has a motive to flee the US before his trial on tax charges.

During the hearing in Miami federal court, prosecutors elaborated on their claims in an arrest complaint that Rotta had hidden more than $20-million from the IRS, using “pseudonyms, complicated corporate structures, and nominees” to conceal offshore assets and income. Rotta has a net worth of $38.5-million, prosecutors told the judge.

Even before Rotta’s arrest, the US Justice Department was weighing whether Credit Suisse breached a 2014 plea agreement in which it paid $2.6-billion, admitted helping thousands of Americans evade taxes, and promised to identify other tax cheats. Rotta hid assets from the IRS in two dozen secret bank accounts between 1985 and 2020, according to prosecutors.

Rotta must post 20% of the $15-million bail package or $3-million in cash, and he’s required to place a corporation holding nine properties in escrow, US Magistrate Judge Jared Strauss ruled. 

Rotta, a citizen of the US, Brazil, and Romania, relied on decades of deception, prosecutors said during the hearing. They said he lied to authorities, shifted money between himself and his cousin in Brazil, and used his passport from Brazil to avoid disclosing his US citizenship to Swiss banks. Prosecutor Sean Beaty told a judge that IRS agents estimate Rotta owes at least $9.25-million in back taxes, $10-million in interest and $6.9-million for a fraud penalty.

IRS Special Agent James O’Leary, who wrote the arrest affidavit, also testified about the case against Rotta, who recently moved from Fisher Island, Florida, to Aventura. Rotta was charged with conspiring to defraud the US and making false statements to the IRS. He faces as many as five years in prison on each count if convicted.

A spokesperson for UBS Group AG, which now owns Credit Suisse, didn’t respond to a request for comment. In a regulatory filing last month, UBS said: “Credit Suisse AG has provided information to US authorities regarding potentially undeclared US assets held by clients at Credit Suisse AG since the May 2014 plea. Credit Suisse AG continues to cooperate with the authorities.”

Read More: Ex-Credit Suisse Customers Face Grand Jury Probes Over Taxes

At the hearing, Rotta was shackled in a prisoner’s jumpsuit, accompanied by a US marshal. He didn’t speak but whispered with his lawyers, jiggled his legs and occasionally shook his head while the government presented its evidence.

Prosecutors cited another Rotta brush with the law amid a rancorous divorce more than a decade ago. In 2012, a family court judge ordered him to take his 16-year-old son to a Utah boarding school. Instead, Rotta took him to Las Vegas to marry his housekeeper’s 18-year-old daughter, which legally emancipated the son. Rotta was convicted of contempt of court and ordered to serve 180 days in jail. 

O’Leary’s arrest affidavit said that after public reports surfaced in 2008 that UBS was under investigation for helping US taxpayers evade taxes, Rotta closed his account at the bank and moved assets to another Swiss bank. He was a client of Beda Singenberger, a Swiss financial adviser charged a decade ago with helping 60 people in the US hide $184-million in secret offshore accounts with names like Real Cool Investments Ltd. and Wanderlust Foundation.

In the US tax case, Rotta used entities like a British Virgin Islands corporation called Edelweiss Corporate Ltd. and the Putzo Foundation in Liechtenstein, according to the complaint. The IRS began auditing Rotta in 2011 after obtaining evidence he had unreported foreign financial accounts, and he denied owning them. 

He claimed that hundreds of thousands of dollars in transfers from foreign accounts were non-taxable loans, and enlisted a cousin from Brazil to tell the IRS he made or facilitated the fake loans, the US said. 

After the IRS assessed additional taxes and penalties against Rotta, he petitioned the US Tax Court and denied having any foreign accounts. The cousin came to the US to “retell the false loan story to IRS attorneys”, the US said. 

Rotta settled the Tax Court case with the IRS, which agreed he didn’t owe more taxes or penalties for 2008 through 2010, according to the affidavit. He also settled an audit with the IRS, which said he owed no more taxes or penalties for 2011 through 2013. Both were based on phoney documents and fraudulent testimony, the US said.

In 2019, Rotta tried to make a voluntary disclosure to the IRS to limit his exposure to criminal prosecution and limit his exposure to a potential $10 million penalty. But his application was full of false statements, according to the complaint. 

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