Saturday, October 21, 2017
Congressional Chief of Staff Charged With Filing False Security Clearance Form, Imprisoned for Failure to File Taxes
A congressional staffer was charged with filing a false security clearance form, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Jessie K. Liu for the District of Columbia and Assistant Director in Charge Andrew Vale of the FBI’s Washington Field Office. He was previously sentenced to prison for willfully failing to file an individual income tax return.
According to the indictment, Issac Lanier Avant, a resident of Arlington, Virginia, was a staff member employed by the House of Representatives since approximately 2000. Since 2002, Avant has been the Chief of Staff for a member of Congress. In approximately December 2006, he began an additional position for the House Committee on Homeland Security, including Deputy Staff Director and Staff Director. The indictment charges that from 2008 through 2012, Avant earned wages of approximately $170,000 and failed to file an individual income tax return with the Internal Revenue Service (IRS) during those years. Avant allegedly had no federal income withheld during those years because in May 2005, he caused a form to be filed with his employer that falsely claimed he was exempt from federal income taxes. According to the indictment, Avant did not have any federal tax withheld from his paycheck until the IRS mandated that his employer begin withholding in January 2013.
In 2008 and again in 2013, for his position with the Committee on Homeland Security, Avant allegedly completed a Standard Form 86, “Questionnaire for National Security Positions” (SF-86), in order to receive a Top Secret security clearance. The indictment charges that on Sept. 18, 2013, Avant willfully made a false statement by responding “no” to the following question on a SF-86: “In the past seven (7) years have you failed to file or pay federal, state, or other taxes when required by law or ordinance?”
Despite earning more than $165,000, Avant failed to timely file his 2009 through 2013 individual income tax returns, causing a tax loss of $153,522. Avant had no federal income withheld during those years because in May 2005, he caused a form to be filed with his employer that falsely claimed he was exempt from federal income taxes. Avant did not have any federal tax withheld from his paycheck until the Internal Revenue Service (IRS) mandated that his employer begin withholding in January 2013. Avant did not file tax returns until after he was interviewed by federal agents.
The court imposed a prison term of approximately 4 months, consisting of 30 days incarceration, followed by incarceration every weekend for 12 months. Avant was also ordered to serve a one-year term of supervised release and to pay restitution in the amount of $149,962 to the IRS.
If convicted, Avant faces a statutory maximum prison term of five years, as well as a term of supervised release and monetary penalties.
Friday, October 20, 2017
A federal grand jury sitting in the Western District of New York returned an eight-count indictment against a former Erie County, New York Democratic party chair for bribing a New York State supreme court justice. Download pigeon_indictment.pdf
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division and Acting U.S. Attorney James P. Kennedy Jr. for the Western District of New York made the announcement.
“Bribery of a judge strikes at the very core of our democracy,” said Acting Assistant Attorney General Blanco. “The independence of the judiciary is paramount to civilized society. Our prosecutors and law enforcement partners will pursue any and all attempts to corrupt our fundamental institutions, including the judiciary.”
“The detailed facts set forth in the indictment provide evidence not only of the charges contained therein but of the tremendous investigation conducted by agents from the Buffalo Division of the FBI together with their partners at the New York State Attorney General’s Office and the New York State Police,” said Acting U.S. Attorney Kennedy. “The indictment speaks for itself.”
G. Steven Pigeon, 56, of Buffalo, New York, was charged with one count of conspiracy to commit bribery and honest services wire fraud, three counts of honest services wire fraud, one count of federal programs bribery and three counts of violation of the Travel Act.
According to the indictment, between February 2012 and April 2013, Pigeon offered and provided things of value to former New York State Supreme Court Judge John A. Michalek, in exchange for official action. Specifically, Pigeon promised employment for a member of Michalek’s immediate family with the 2012 campaign to reelect President Barack Obama; offered to help the same family member obtain employment with the U.S. Department of State; and agreed to support Michalek’s application for appointment to the appellate division of the New York State Supreme Court, all to obtain favorable judicial decisions from Michalek and to control who Michalek would appoint to a paid court receivership.
Pigeon was arraigned this morning before U.S. Magistrate Judge Michael J. Roemer and released on conditions pending trial of this matter before the Honorable Richard J. Arcara, U.S. District Judge.
The indictment is the result of an investigation by the FBI Buffalo Field Office, under the direction of Special Agent-in-Charge Adam S. Cohen; the New York State Attorney General’s Office, under the direction of Eric T. Schneiderman; and the New York State Police, under the direction of Major Edward Kennedy. The case is being prosecuted by Deputy Chief John Keller of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Paul E. Bonanno of the Western District of New York.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Thursday, October 19, 2017
OECD Hiring Senior Adviser - Harmful Tax / Tax Crime - International Co-operation and Tax Administration Division (CTPA/ICA)(Job Number: 11720)
The OECD has earned a leading role in international tax issues. The Centre for Tax Policy and Administration (CTPA) is the focal point for the OECD’s work on all taxation issues, both international and domestic, and it works to advance the Strategic Orientations of the Secretary General, ensuring impact of the OECD tax work in the international governance architecture, in co-ordination with the OECD Sherpa team. The CTPA collaborates with other parts of the Organisation on issues such as tax and climate change, tax and growth, and the impact of taxation on labour markets and several other multidisciplinary projects The CTPA also provides the analytical support to the OECD’s Committee on Fiscal Affairs (CFA), which consists of senior tax policy and administration officials from OECD countries, Associate and Partner countries and other international and regional tax organisations. Through its work, the CTPA enhances the OECD’s global role in standard-setting, building knowledge, communicating with the world and interacting with governments from around the world to inform and influence policy making in the tax area.
The CTPA is looking for a Senior Adviser to lead, manage and supervise the work of the Forum on Harmful Tax Practices (FHTP) and the Task Force on Tax Crimes and other crimes (TFTC). The sucessful candidate will report to the Head of the International Co-operation and Tax Administration Division (CTPA/ICA).
The vacancy is open to nationals of countries and jurisdictions participating in the Inclusive Framework on BEPS (see link for full list of members)
- Manage and motivate the team working on the Forum on Harmful Tax practices (FHTP) and the Task Force on Tax Crimes and Other Crimes (TFTC) to deliver high quality results and contribute to their professional development.
Analysis, project management and drafting
- Lead and supervise the work of the FHTP.
- Provide technical input for FHTP members to meet FHTP minimum standards.
- Supervise and review the drafting of notes and reports as necessary for circulation and approval by the FHTP and the TFTC.
- Monitor developments in relation to the work on harmful tax practices.
- Lead and supervise the work of the TFTC.
- Support the work of the Academy for Tax Crime Investigation and other regional capacity building efforts.
Co-ordination, liaison and representation
- Co-ordinate the organisation and preparation for the meetings of the FHTP and TFTC.
- Liaise with other relevant CTPA Divisions to ensure co-ordination among the different areas of work.
- Present, discuss and explain the OECD’s work in the area of BEPS and tax and crime at meetings, seminars, conferences and briefings.
- Lead the organisation of the bi-annual Forum on Tax and Crime.
- Contribute to other work of the ICA Division and the CTPA when required.
- An advanced university degree or equivalent in taxation, law, economics, public finance, accounting or business administration.
- A minimum of eight years’ relevant experience in a tax administration, Ministry of Finance, financial institution, law or accounting firm, or another type of organisation involved in questions related to base erosion and profit shifting, aggressive tax planning, exchange of information, tax policy analysis and/or similar issues.
- Proven experience of presenting complex issues at meeting and conferences.
- Good knowledge of OECD instruments and standards in the tax area.
- Good knowledge of the principles of international taxation.
- Fluency in one of the two OECD official languages (English and French) and knowledge of the other, with a commitment to reach a good working level.
- Knowledge of other languages would be an asset.
- For this role, the following competencies would be particularly important: Achievement focus, Analytical thinking, Drafting skills, Managing resources, Teamwork and Team leadership, Diplomatic sensitivity, Strategic thinking.
- Please refer to the OECD Core Competencies and the level 4 indicators.
18 months fixed term appointment, with the possibility of renewal.
Monthly base salary starting from 8,200 EUR plus allowances based on eligibility, exempt of French tax.
The full 2017-18 Faculty Speaker Series schedule is outlined in the image – please feel free to share it with blogs and colleagues at other schools.
On October 4, 2017, Attorney General Jefferson B. Sessions III and Acting Secretary of Homeland Security Elaine Duke, together with Chinese State Councilor and Minister of Public Security Guo Shengkun, co-chaired the first U.S.-China Law Enforcement and Cybersecurity Dialogue (LECD). The LECD is one of four dialogues agreed to by President Trump and President Xi during their first meeting in Mar-a-Lago in April 2017 and is an important forum for advancing bilateral law enforcement and cyber priorities between our two governments.
The following topics were discussed:
1) Repatriation. Both sides acknowledged the need to make continued progress in the area of repatriation of foreign nationals with final orders of removal. The United States and China committed to develop a repeatable process whereby the identities of individuals with final orders of removal are verified in a timely manner and travel documents are issued within 30 days of verification. This process should be finalized within three months following the LECD.
2) Counter-narcotics. Both sides intend to continue to enhance cooperation on narcotics control and enforcement. Such cooperation may include: exchanging intelligence and operational information on trafficking of new psychoactive substances and other synthetic drugs, opioids, and cocaine; combatting the illicit production and trafficking of fentanyl and fentanyl-related substances and precursor chemicals, with attention to applicable laws, scheduling actions, and use of express mail and consignment services; exchanging technical information on the relevant science and law; demand reduction cooperation; exchanging views on international narcotics control issues through UN-based and other multilateral forums; and sharing tracking information for packages between the two countries so as to identify individuals and criminal networks responsible for narcotics trafficking.
3) Cybercrime and Cybersecurity. Both sides will continue their implementation of the consensus reached by the Chinese and American Presidents in 2015 on U.S.-China cybersecurity cooperation, consisting of the five following points: (1) that timely responses should be provided to requests for information and assistance concerning malicious cyber activities; (2) that neither country’s government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to companies or commercial sectors; (3) to make common effort to further identify and promote appropriate norms of state behavior in cyberspace within the international community; (4) to maintain a high-level joint dialogue mechanism on fighting cybercrime and related issues; and (5) to enhance law enforcement communication on cyber security incidents and to mutually provide timely responses.
Both sides reiterated that all consensus and cooperative documents achieved at the three rounds of the China-U.S. High-Level Joint Dialogue on Combating Cyber Crimes and Related Issues since 2015 remain valid.
Both sides intend to improve cooperation with each other on cybercrime, including sharing cybercrime-related leads and information, and responding to Mutual Legal Assistance requests, in a timely manner, including with regard to cyber fraud (including business email compromises), hacking crimes, abuse of internet for terrorist purposes, and internet dissemination of child pornography.
Both sides will continue to cooperate on network protection, including maintaining and enhancing cybersecurity information sharing, as well as considering future efforts on cybersecurity of critical infrastructure.
Both sides intend to maintain and make full use of the established hotline mechanism for addressing urgent cybercrime and network protection issues pertaining to significant cybersecurity incidents, and to communicate in a timely way at the leadership level or working level, as needed.
4) Fugitives. Both sides will continue to cooperate to prevent each country from becoming a safe haven for fugitives and will identify viable fugitive cases for cooperation. Both sides plan to continue regular meetings and working groups to identify priority cases. Both sides commit to take actions involving fugitives only on the basis of respect for each other’ssovereignty and laws, and any violation of the above mentioned principles will be addressed in accordance with law.
While differences remain, both sides intend to make actual progress on all of the above matters, to make possible another Dialogue in 2018 to measure that progress.
Wednesday, October 18, 2017
The Future of Law Schools Envisioning a More Collaborative Educational Model (event in D.C. Thurs, Nov. 2 )
This November, the Thomson Reuters Legal Executive Institute proudly presents a timely and provocative examination of short- and long-term strategies toward effecting legal education reform on a national scale. Helmed by a distinguished faculty of prominent academics and practitioners, this forum provides concrete solutions in the spirit of collaborative growth.
EVENT LOCATION: Georgetown University Hotel & Conference Center | Washington, DC
For details or to register, call 1-800-308-1700. Seating is extremely limited.
Why You Should Attend
Who Should Attend
The Securities and Exchange Commission announced that a whistleblower has earned an award of more than $1 million for providing the SEC with new information and substantial corroborating documentation of a securities law violation by a registered entity that impacted retail customers.
“Today’s award reflects the impact that whistleblower information can have in uncovering violations that harm the retail investor,” said Jane Norberg, Chief of the SEC’s Office of the Whistleblower. “We welcome high-quality information about potential securities-law violations from those in and outside a company.”
More than $162 million has been awarded to 47 whistleblowers. By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action.
Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million. All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money is taken or withheld from harmed investors to pay whistleblower awards.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced that the goods and services deficit was $42.4 billion in August, down $1.2 billion from $43.6 billion in July, revised. August exports were $195.3 billion, $0.8 billion more than July exports. August imports were $237.7 billion, $0.4 billion less than July imports.
The August decrease in the goods and services deficit reflected a decrease in the goods deficit of $0.9 billion to $64.4 billion and an increase in the services surplus of $0.3 billion to $22.0 billion.
Year-to-date, the goods and services deficit increased $29.1 billion, or 8.8 percent, from the same period in 2016. Exports increased $84.9 billion or 5.8 percent. Imports increased $114.0 billion or 6.4 percent.
Goods and Services Three-Month Moving Averages (Exhibit 2)
The average goods and services deficit decreased $1.3 billion to $43.2 billion for the three months ending in August.
* Average exports of goods and services increased $1.0 billion to $194.9 billion in August.
* Average imports of goods and services decreased $0.3 billion to $238.1 billion in August.
Year-over-year, the average goods and services deficit increased $1.1 billion from the three months ending in August 2016.
* Average exports of goods and services increased $9.4 billion from August 2016.
* Average imports of goods and services increased $10.5 billion from August 2016.
Exports (Exhibits 3, 6, and 7)
Exports of goods increased $0.6 billion to $129.2 billion in August.
Exports of goods on a Census basis increased $0.1 billion.
* Consumer goods increased $1.0 billion.
o Pharmaceutical preparations increased $0.6 billion.
* Capital goods increased $0.4 billion.
o Telecommunications equipment increased $0.4 billion.
* Industrial supplies and materials decreased $1.0 billion.
o Fuel oil decreased $0.7 billion.
* Foods, feeds, and beverages decreased $0.4 billion.
Net balance of payments adjustments increased $0.5 billion.
Exports of services increased $0.2 billion to $66.1 billion in August.
* Travel (for all purposes including education), other business services (which includes research and development services; professional and management services; and technical, trade-related, and other services), and financial services each increased $0.1 billion.
* Transport, which includes freight and port services and passenger fares, decreased $0.2 billion.
Imports (Exhibits 4, 6, and 8)
Imports of goods decreased $0.3 billion to $193.6 billion in August.
Imports of goods on a Census basis decreased $0.4 billion.
* Industrial supplies and materials decreased $0.5 billion.
o Finished metal shapes decreased $0.2 billion.
o Copper decreased $0.2 billion.
* Capital goods decreased $0.5 billion.
o Computer accessories decreased $0.3 billion.
o Civilian aircraft decreased $0.2 billion.
* Automotive vehicles, parts, and engines increased $0.7 billion.
o Passenger cars increased $0.5 billion.
Net balance of payments adjustments increased $0.1 billion.
Imports of services decreased $0.1 billion to $44.1 billion in August.
* Transport decreased $0.2 billion.
* Travel (for all purposes including education) increased $0.1 billion.
Real Goods in 2009 Dollars – Census Basis (Exhibit 11)
The real goods deficit decreased less than $0.1 billion to $61.8 billion in August.
* Real exports of goods decreased $1.1 billion to $125.2 billion.
* Real imports of goods decreased $1.1 billion to $187.0 billion.
Revisions to July exports
* Exports of goods were revised up less than $0.1 billion.
* Exports of services were revised up $0.1 billion.
Revisions to July imports
* Imports of goods were revised down less than $0.1 billion.
* Imports of services were revised up less than $0.1 billion.
Goods by Selected Countries and Areas: Monthly – Census Basis (Exhibit 19)
The August figures show surpluses, in billions of dollars, with South and Central America ($2.7), Hong Kong ($2.5), Singapore ($0.8), United Kingdom ($0.6), and Brazil ($0.4). Deficits were recorded, in billions of dollars, with China ($29.7), European Union ($10.9), Japan ($6.3), Mexico ($5.8), Germany ($4.8), Italy ($2.5), South Korea ($2.1), India ($1.6), Taiwan ($1.5), France ($0.8), OPEC ($0.8), Canada ($0.4), and Saudi Arabia ($0.1).
* The deficit with China decreased $2.1 billion to $29.7 billion in August. Exports increased $0.8 billion to $11.6 billion and imports decreased $1.2 billion to $41.3 billion.
* The deficit with the European Union decreased $1.2 billion to $10.9 billion in August. Exports increased $1.4 billion to $24.2 billion and imports increased $0.2 billion to $35.1 billion.
The OECD is a global economic forum working with 35 member countries and more than 100 emerging and developing economies to make better policies for better lives. Our mission is to promote policies that will improve the economic and social well-being of people around the world. The Organisation provides a unique forum in which governments work together to share experiences on what drives economic, social and environmental change, seeking solutions to common problems.
he CTPA is looking for a dynamic and experienced Senior Adviser to co-ordinate and manage an annual Global Relations Programme of approximately 50 multilateral learning and dialogue events on tax matters. The position is based in the recently established Global Relations and Development Division (CTPA/GRD) which combines Global Relations and Tax and Development work, with the aim of exploiting synergies to achieve coherent services and impact for developing countries. The Division leads the OECD’s work to help all countries benefit from OECD standards and policies in taxation. This is achieved through helping to ensure developing countries have a voice in standard-setting bodies established by the OECD; through providing capacity-building support and through co-operation with other international and regional organisations and donors.
The successful candidate will have extensive experience in international tax matters, including working for or with developing countries. S/he will provide leadership to develop a programme of events, particularly related to the implementation of the BEPS package. S/he will have the ability to establish and maintain effective working relationships with policymakers and practitioners worldwide. The successful candidate will report directly to the Head of the Division.
The vacancy is open to nationals of countries and jurisdictions participating in the Inclusive Framework on BEPS (see link for full list of members)
- Develop and plan a coherent package of capacity-building multilateral programmes, tailored to the needs of developing countries, and selected bilateral programmes with some key partners.
- Lead the development of e-learning capacity-building materials and modules for developing countries, taking into account the OECD’s priority areas of international taxation, tax policy and tax administration.
- Contribute to the development of partnerships with regional tax and political organisations to ensure the globalisation of OECD standards on tax.
- Manage the annual programme of events, in collaboration with the Multilateral Tax Centres, working closely with divisions and experts for their participation, as required.
- Manage and motivate a small multicultural, multidisciplinary team of policy analysts and support staff to deliver, monitor and evaluate high quality learning services to developing countries.
- Manage the production of reports and other products, including reviewing and drafting documents and publications.
- Develop systems and procedures for learning service delivery to developing countries including needs assessment, monitoring, evaluation and reporting.
- Develop e-learning programmes and the use of digital technology in the needs assessment, delivery, monitoring, evaluation and reporting of multilateral learning services.
- Establish and maintain close contact with national authorities, academics and research institutes, the private sector and other international organisations with expertise and/or interest in working with developing countries on tax matters.
- Represent the OECD in internal and external fora, G20, Asia Pacific Economic Co-operation (APEC).
- Carry out fundraising with donors and other partners.
Ideal Candidate Profile
- An advanced university degree in economics, law, accountancy, public finance or a professional qualification in other relevant areas of public policy.
- A minimum of eight years’ relevant experience in a national administration, international organisation, research institution, university or the private sector.
- Proven experience in managing and delivering learning services in tax policy or administration, working in or with developing countries.
- A broad knowledge of the OECD's substantive work, and a strategic sense of the role of the OECD in the overall framework of international co-operation and domestic policy formulation.
- Fluency in one of the two OECD official languages (English and French) and knowledge of the other, with a commitment to reach a good working level.
- Knowledge of other languages (particularly Spanish) would be an asset
- For this role, the following competencies would be particularly important: Achievement focus, Drafting skills, Managing resources, Teamwork and Team leadership, Strategic Thinking and Strategic Networking.
- Please refer to the OECD Core Competencies and the level 4 indicators.
- Two year fixed-term appointment, with the possibility of renewal.
- Monthly base salary starting from 8,200 EUR plus allowances based on eligibility, exempt of French tax.
Please note that the appointment may be made at a lower grade based on the qualifications and professional experience of the selected applicant.
The OECD is an equal opportunity employer and welcomes the applications of all qualified candidates who are nationals of OECD member countries and nationals of countries and jurisdictions participating in the inclusive framework on BEPS irrespective of their racial or ethnic origin, opinions or beliefs, gender, sexual orientation, health or disabilities.
The OECD promotes an optimal use of resources in order to improve its efficiency and effectiveness. Staff members are encouraged to actively contribute to this goal.
Tuesday, October 17, 2017
Governments rapidly dismantling harmful tax incentives worldwide: BEPS Project driving major changes to international tax rules
Governments have dismantled, or are in the process of amending, nearly 100 preferential tax regimes as part of the OECD/G20 BEPS standards to improve the international tax framework, according to a progress report released today.
The report provides details on the outcome of peer reviews undertaken of 164 preferential tax regimes identified amongst the more than 100 jurisdictions participating in the OECD Inclusive Framework on BEPS.
The OECD/G20 BEPS Project delivers solutions for governments to close the gaps in existing international rules that allow corporate profits to “disappear” or be artificially shifted to low or no tax environments, where companies have little or no economic activity. Revenue losses from BEPS are conservatively estimated at USD 100-240 billion annually, or the equivalent of 4-10% of global corporate income tax revenues.
The BEPS Action 5 standard covers tax incentives (“preferential tax regimes”) that apply to mobile business income, such as financial and services income and income from intellectual property, which multinationals can shift with relative ease. To avoid a race to the bottom and negative spillover effects on other jurisdictions' tax bases, all 102 members of the BEPS Inclusive Framework have committed to ensuring that any regimes offered meet the criteria that have been agreed as part of BEPS Action 5. Crucially, this includes a requirement that taxpayers benefiting from a regime must themselves undertake the core business activity, ensuring the alignment of taxation with genuine business substance.
The Action 5 Progress Report on Preferential Tax Regimes includes the review of 164 preferential tax regimes offered by Inclusive Framework members against the Action 5 standard.
Of the 164 regimes reviewed in the last twelve months:
- 99 require action;
- For 93 of these 99 regimes, the required changes have already been completed or initiated by Inclusive Framework members,
- 56 regimes do not pose a BEPS risk,
- 9 regimes are still under review, due to extenuating circumstances such as the impact of the recent hurricanes on certain Caribbean jurisdictions.
"Harmful tax practices are a particularly aggressive way through which jurisdictions can encourage the erosion of other jurisdictions' tax bases," said Martin Kreienbaum, Chair of the Inclusive Framework on BEPS. "It is critical that they be addressed, to protect the level playing field and prevent a race to the bottom. The Inclusive Framework's peer reviews are resulting in real changes to these tax incentives, making it harder for multinationals to artificially shift their profits around the world for a tax advantage."
"These outcomes demonstrate that the political commitments of members of the Inclusive Framework are rapidly resulting in measureable, tangible progress" said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration. "The jurisdictions concerned are already working to address the harmful tax practices in their preferential regimes. In fact, countries have already changed or are changing almost 95 percent of the regimes where action is needed."
Inclusive Framework members have agreed an ambitious timeline, whereby jurisdictions whose regimes have harmful features are expected to adjust their regimes as soon as possible and generally no later than October 2018. The OECD will continue to publish the results of reviews of preferential regimes and the progress that jurisdictions are making to adjust them to reduce the risks posed to tax bases.
Will Equifax Executives Face SEC Charges For Selling Their Shares Before the Public Disclosure of 145 Million Hacked Consumer Files Led to Share Price Collapse?
From mid-May 2017 through July 2017 Equifax, one of the nation’s three major credit reporting agencies, allowed the personal and financial records of 145.5 million American consumers to be collected by nefarious criminal actors. On March 8, 2017, reports the New York Post, Equifax had been warned by the Department of Homeland Security about the software flaw that could lead to the breach, but Equifax did not patch the flaw.
Equifax, as reported by teh Federal Trade Commission, allowed access to people’s names, Social Security numbers, birth dates, addresses and, in some instances, driver’s license numbers. They also stole credit card numbers for about 209,000 people and dispute documents with personal identifying information for about 182,000 people. UK and Canada personal information was also hacked.
“Equifax generates substantial income as a gatekeeper and fiduciary of the public’s financial information and credit backgrounds and thus must be held to the highest standard of public trust. Insider trading undermines investor confidence in the fairness and integrity of the securities markets, said Professor William Byrnes of Texas A&M Law School. “Because this insider trading investigation involves Equifax executives, it is imperative that the SEC transparently and fully investigate to determine when each became ‘aware’ of the massive cyber breach. SEC Rule 10b5-1 provides that an insider trades on the basis of material nonpublic information if the insider is ‘aware’ of the material nonpublic information when making the purchase or sale.”
Byrnes continued “It has been reported that the CFO John Gamble sold 13 percent of his Equifax stake and Joseph Loughranth the president of U.S. information solutions sold nine percent two days after Equifax employees discovered the massive data breach of the company, when the share price hovered around $146. On September 7, 2017, the day before news of the extensive data breach was released to the public, Equifax shares still traded around $142, but a day later upon the announcement of the data breach, Equifax shares fell to $123 and today its shares sit around $106. If the SEC discovers through interviews and searching emails and internal memos that Equifax employees informed any of the three executives of the data breach before August 1, 2017, it is probable that the SEC will seek disgorgement of the profits and a civil penalty up to three times the loss avoided by the early sale.
Byrnes cautioned, “But if the evidence is strong of being informed and then instructing a sale, it is possible that the SEC also seeks a criminal indictment which carries a maximum prison sentence of 20 years and fine of $5 million.”
“Moreover, Equifax itself carries risk of corporate civil or criminal indictment from the investigation. If the investigation uncovers insider trading by the executives, then Equifax may be charged either civilly or criminally if a controlling superior of one of the executives knew or recklessly disregarded that an executive was informed of the data breach and was then likely to engage in selling shares before the public announcement. The company would be able to defend itself by showing that it took appropriate steps to prevent the sales. The most likely risk concerns the CFO because of the size of his share sale two days after employees at Equifax discovered the data breach and the CFO is probably a controlling superior of the other two executives. A corporate civil insider trading penalty may be up to a minimum of one million dollars or a maximum of three times the loss avoided,” warned Byrnes.
The Washington Post reported that the share sells were not part of a pre-planned transaction. Bloomberg reported that the DOJ has opened a criminal investigation into several issues resulting from the data breach, including securities laws.
FCPA Blog reports here on the continuing saga of the 1MDB missing $3 billion dollars.
MAS said Leissner managed the client relationship with 1MDB for its three bond issues from 2012 to 2013. The bond issues were fully underwritten by London-based Goldman Sachs International. A Goldman team from Hong Kong, Singapore, Malaysia, and the United Arab Emirates handled the work.
In the reference letter Leissner wrote on Goldman Sachs' letterhead in June 2015, he said: "Goldman Sachs had conducted due diligence on Mr Low Taek Jho and his family, and had not detected any money laundering concerns with respect to Mr Low or his family." Low, a Malaysian citizen, has been tied by U.S., Swiss, and Singapore prosecutors to the diversion of $3 billion or more from 1MDB. Read the full FCPA blog story about 1MDB and the stolen $3 billion, most of which remains missing...
Monday, October 16, 2017
SEC Obtains $58 Million Judgment against Perpetrator of International Pump-and-Dump Scheme Involving Marley Coffee
The Securities and Exchange Commission obtained a $58 million judgment against a UK and Canadian resident charged with perpetrating a multimillion-dollar, international pump-and-dump scheme involving the stock of Jammin' Java Corp., a company that used trademarks of the late reggae artist Bob Marley to sell coffee products.
The final judgment against Wayne Weaver, entered on October 2, 2017, permanently enjoins Weaver from violating Section 5 of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder; permanently bars Weaver from participating in penny stock offerings; and orders Weaver to pay disgorgement of $26,371,585, prejudgment interest of $5,221,809, and a civil penalty of $26,371,585, for a total of $57,964,979. On September 15, 2017, Weaver filed a notice of appeal.
The SEC previously obtained consent judgments against all other defendants named in the action, ordering the payment of more than $8 million in disgorgement, interest, and penalties. The judgments, entered from July 2016 to May 2017, permanently enjoin:
- Jammin' Java, Shane Whittle, Stephen Wheatley, Michael Sun, Kevin Miller, Mohammed Al-Barwani, and Rene Berlinger from violating Section 5 of the Securities Act;
- Alexander Hunter (now known as John Alexander) and Thomas Hunter from violating Section 17(a) of the Securities Act;
- Whittle, Alexander Hunter, and Thomas Hunter from violating Section 10(b) of the Exchange Act and Rule 10b-5;
- Whittle and Sun from violating Section 13(d) of the Exchange Act and RulesÂ 13d-1 and 13d-2; and
- Whittle from violating Section 16(a) of the Exchange Act and Rule 16a-3.
The judgments also order:
- Jammin' Java to pay $605,331 in disgorgement, together with $94,669 in prejudgment interest, for a total of $700,000;
- Whittle to pay disgorgement of $1,894,669, prejudgment interest of $360,940, and a civil penalty of $250,000, for a total of $2,505,609;
- Alexander Hunter and Thomas Hunter each to pay a civil penalty of $300,000;
- Wheatley to pay $2,364,125 in disgorgement, together with $385,875 in prejudgment interest, for a total of $2.75 million;
- Sun to pay disgorgement of $400,000 and prejudgment interest of $33,796;
- Miller to pay disgorgement of $783,369 and prejudgment interest of $116,631;
- Al-Barwani to pay disgorgement of $270,000 and prejudgment interest of $41,204; and
- Berlinger to pay disgorgement of $47,070 and prejudgment interest of $6,692.
The judgments also bar:
- Wheatley and Miller from participating in penny stock offerings permanently;
- Whittle from serving as an officer or director or participating in penny stock offerings for ten years; and
- Alexander Hunter, Thomas Hunter, Sun, Al-Barwani, and Berlinger from participating in penny stock offerings for five years.
Jammin' Java, Shane Whittle, Alexander Hunter, Thomas Hunter, Stephen Wheatley, Michael Sun, Kevin Miller, Mohammed Al-Barwani, and Rene Berlinger each consented to entry of the judgments against them without admitting or denying the SEC's allegations.
The SEC's litigation was conducted by Timothy S. Leiman, Daniel J. Hayes, Robert M. Moye, and Peter Senechalle in the Chicago Regional Office. The investigation that led to the SEC's charges was led by Paul M. G. Helms, who also assisted with the litigation.
The SEC acknowledges the assistance of the Financial Industry Regulatory Authority, the British Columbia Securities Commission, the Capital Markets Board of Turkey, the Cayman Islands Monetary Authority, the Jersey Financial Services Commission, the Mexican ComisiÃ³n Nacional Bancaria y de Valores, the Ontario Securities Commission, the Republic of the Marshall Islands Banking Commission, the Swiss Financial Market Supervisory Authority, the United Kingdom Financial Conduct Authority, the Superintendencia del Mercado de Valores de PanamÃ¡, and the Financial Market Authority Liechtenstein.
Sunday, October 15, 2017
Retired U.S. Army Colonel Indicted for Conspiring to Bribe Senior Government Officials of the Republic of Haiti
A retired U.S. Army colonel was charged in an indictment filed today for his alleged role in a foreign bribery and money laundering scheme in connection with a planned $84 million port development project in Haiti.
Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division, Acting U.S. Attorney William D. Weinreb of the District of Massachusetts, Assistant Director Stephen Richardson of the FBI’s Criminal Investigative Division and Special Agent in Charge Harold M. Shaw of the FBI’s Boston Field Office made the announcement.
Joseph Baptiste, 64, of Fulton, Maryland, was charged with one count of conspiracy to violate the Foreign Corrupt Practices Act and the Travel Act, one count of violating the Travel Act and one count of conspiracy to commit money laundering in an indictment filed in the District of Massachusetts.
The indictment alleges that Baptiste solicited bribes from undercover FBI agents in Boston who posed as potential investors in connection with a proposed project to develop a port in the Moles Saint Nicolas area of Haiti. According to the indictment, the proposed project was expected to cost approximately $84 million, and was to involve the construction of a cement factory in its first phase. The indictment alleges that during a recorded meeting at a Boston-area hotel, Baptiste told the agents that he would funnel the payments to Haitian officials through a non-profit entity that he controlled — which was based in Maryland and purported to help impoverished residents of Haiti — in order to secure government approval of the project.
The indictment further alleges that in telephone calls Baptiste discussed bribing an aide to a senior Haitian official by giving him a job on the port development project after he left his position. It further alleges that although Baptiste ultimately used for personal purposes approximately $50,000 that he received from the undercover agents for the payment of bribes to Haitian officials — money that was wired at Baptiste’s direction to a non-profit organization he controls — he intended to seek additional money from the undercover agents to use for future bribe payments in connection with the port project.
An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. Attachment(s):
Saturday, October 14, 2017
This document is now available on SOI’s Tax Stats Web page and contains the Federal tax forms, schedules, and information documents selected for SOI's Tax Year 2016 studies. It is organized in the following two parts:
- Individual and Tax Exempt studies include data related to the Form 1040 Individual Income Tax Return series, as well as data on sales of capital assets and an extensive program that connects income tax returns with information documents filed by third parties. The studies also include data collected for estate and gift taxes, tax-exempt organizations, and tax-exempt bonds.
- Corporation, Partnership, and International studies focus on data collected from the Form 1120 series, SOI’s partnership program, as well as information collected from international filers.
SOI works in collaboration with data users both inside and outside of the Federal Government to develop the information collected for each SOI study. SOI bases most of its programs on stratified samples of returns for which data are collected prior to IRS audits; therefore, the data represent information as originally reported by taxpayers. Each tax form included in the SOI program is represented in this volume. The specific data items captured for each study are indicated on facsimiles of the forms and schedules. Data from certain forms and schedules are collected periodically, rather than annually. For this reason, the contents of this document will vary somewhat from year to year.
Friday, October 13, 2017
The Platform for Collaboration on Tax invites comments on a draft toolkit on the taxation of offshore indirect transfers of assets
The draft version of The Taxation of Offshore Indirect Transfers – A Toolkit is now available for download Download Discussion-draft-toolkit-taxation-of-offshore-indirect-transfers
The Platform for Collaboration on Tax – a joint initiative of the IMF, OECD, UN and World Bank Group – is seeking public feedback on a draft toolkit designed to help developing countries tackle the complexities of taxing offshore indirect transfers of assets, a practice by which some multinational corporations try to minimise their tax liability.
The tax treatment of 'offshore indirect transfers' (OITs) — the sale of an entity located in one country that owns an "immovable" asset located in another country, by a non-resident of the country where the asset is located — has emerged as a significant concern in many developing countries. It has become a relatively common practice for some multinational corporations trying to minimise their tax burden, and is an increasingly critical tax issue in a globalised world. But there is no unifying principle on how to treat these transactions, and the issue was not addressed in the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project. This draft toolkit, "The Taxation of Offshore Indirect Transfers – A Toolkit," examines the principles that should guide the taxation of these transactions in the countries where the underlying assets are located. It emphasises extractive (and other) industries in developing countries, and considers the current standards in the OECD and the U.N. model tax conventions, and the new Multilateral Convention. The toolkit discusses economic considerations that may guide policy in this area, the types of assets that could appropriately attract tax when transferred indirectly offshore, implementation challenges that countries face, and options which could be used to enforce such a tax.
The toolkit responds to a request by the Development Working Group of the G20, and is part of a series the Platform is preparing to help developing countries design their tax policies, keeping in mind that those countries may have limitations in their capacity to administer their tax systems. Previous reports have included discussions of tax incentives, and external support for building tax capacity in developing countries. This series complements the work that the Platform and the organisations it brings together are undertaking to increase the capacity of developing countries to apply the OECD/G20 BEPS Project.
The Platform partners now seek comments by 20 October 2017 from all interested stakeholders on this draft. Comments should be sent by e-mail to email@example.com, a common comment box for all the Platform organisations. Spanish and French language versions of the toolkit are forthcoming and will also be posted for comment. The Platform aims to release the final toolkit by the end of 2017.
Questions to consider
- Does this draft toolkit effectively address the rationale(s) for taxing offshore indirect transfers of assets?
- Does it lay out a clear principle for taxing offshore indirect transfers of assets?
- Is the definition of an offshore indirect transfer of assets satisfactory?
- Is the discussion regarding source and residence taxation in this context balanced and robustly argued?
- Is the suggested possible expansion of the definition of immovable property for the purposes of the taxation of offshore indirect transfers reasonable?
- Is the concept of location-specific rents helpful in addressing these issues? If so, how is it best formulated in practical terms?
- Are there other implementation approaches that should be considered?
- Is the draft toolkit's preference for the 'deemed disposal' method appropriate?
- Are the complexities in the taxation of these international transactions adequately represented?
Please do not restrict yourself to these questions; any other views you have on addressing the taxation of offshore indirect transfers of assets would be welcome. Comments and inputs on the draft will be published, and will be taken into consideration in finalising the toolkit.
Please note that all comments received will be made publicly available. Comments submitted in the name of a collective "grouping" or "coalition", or by any person submitting comments on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective group, or the person(s) on whose behalf the commentator(s) are acting.
Media queries should be directed to:
This report looks at the impact on the shadow economy of changes in ways of working and business models, the growth of the digital economy and the emergence of new technologies. While these are causing some new shadow economy activities to emerge and some existing ones to expand in scale or scope, they are also providing tax administrations with new opportunities and tools to enhance compliance. The report sets out a number of examples of effective actions being taken by tax administrations utilising technology, behavioural insights and new sources of data. It also recommends a number of areas for further targeted work to help improve tax administrations’ ability to tackle shadow economy activity, including for collaborative work on the sharing and gig economy. Download Shining-light-on-the-shadow-economy-opportunities-and-threats
Thursday, October 12, 2017
Country-by-Country (CbC) Reporting is one of the four minimum standards under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project to which over 100 countries have
committed, covering the tax residence jurisdictions of nearly all large MNE groups. Where CbC Reporting is implemented effectively, and in line with the conditions set out in the BEPS Action 13 Report, it will give tax authorities unprecedented access to information on the global allocation of an MNE group's revenue, profit, tax and other attributes for high level transfer pricing risk assessment and the assessment of other BEPS-related risks.
This handbook supports countries in the effective use of CbC Reports by incorporating them into a tax authority's risk assessment process, including:
- a description of the role of tax risk assessment in tax administration, the core characteristics of an effective risk assessment system, and examples of the approaches used in different countries;
- an outline of the information contained in CbC Reports, and the potential advantages CbC Reports have over data from other sources;
- consideration of the ways in which CbC Reports can be incorporated into a tax authority's risk assessment framework and a description of some of the main potential tax risk indicators that may be identified using CbC Reports;
- a description of some of the challenges that may be faced by a tax authority in using CbC Reports for tax risk assessment and how some of these may be dealt with;
- an outline of some of the other sources of data that may be used by a tax authority alongside CbC Reports; and
- an overview of how the results of a tax risk assessment using CbC Reports may be used and the next steps that should be taken.
Wednesday, October 11, 2017
This report provides an overview of some of the technology tools that tax authorities have implemented to address tax evasion and tax fraud, focusing on electronic sales suppression and false invoicing. The report also includes a more technical catalog of these technology solutions, with a view to encouraging other tax authorities that are facing the same types of risks to draw on that experience. The report also discusses complementary work that tax authorities are undertaking to address the cash economy and sharing economy, which, although not types of tax evasion and fraud themselves, can facilitate it. Download Technology-tools-to-tackle-tax-evasion-and-tax-fraud
Tuesday, October 10, 2017
We, the heads of 48 tax administrations, met in Oslo for the 11th Plenary meeting of the OECD Forum on Tax Administration (FTA). The meeting brought together over 180 delegates, including the Treasury Minister of Argentina - the incoming G20 Presidency - the Finance Minister of Norway, Tax Commissioners and senior officials, representatives of business as well as international partner organisations. We would like to thank our hosts, the Norwegian Tax Administration, for the excellent arrangements for this meeting and for the warm welcome to Oslo.
The Forum on Tax Administration brings together Tax Commissioners of the most advanced tax administrations worldwide, including OECD and G20 countries, to work collaboratively on global tax administration challenges and take collective action to achieve common goals. Together FTA members collect EUR 8.5 trillion in revenues to fund public services and deliver government objectives. At this year’s Plenary we focused on the following interlocking themes:
At this year’s Plenary we focused on the following interlocking themes: Supporting the OECD/G20 international tax agenda, in particular through implementing automatic
Supporting the OECD/G20 international tax agenda, in particular through implementing automatic exchange of information, the BEPS outcomes and actions to enhance tax certainty;
Improving compliance through work on the shadow economy and a future focus on the effective use of data, including from online intermediaries in the sharing economy;
Building the tax administration of the future with a focus on digital services and delivery, and supporting wider capacity building in developing countries, core to achieving the Sustainable Development Goals, including through assistance on the implementation of BEPS and automatic exchange of information.
Supporting the international tax agenda
We continue to prioritise implementation of the OECD/G20 international tax agenda. On automatic exchange of bank information, pursuant to the Common Reporting Standard (CRS), we have put everything in place domestically and internationally to exchange within the timelines to which our jurisdictions have committed. The automatic exchange of information is making accounts held offshore visible to tax authorities for the first time, allowing unpaid tax to be recovered and appropriate penalties applied to those who do not come forward voluntarily. As reported by the OECD to the G20, disclosure initiatives previously taken in advance of this change have already identified close to EUR 85 billion in
September 2017, the time of our Plenary, is a key milestone for the first exchanges of CRS information and we are pleased to announce that such exchanges are now beginning between many of our members. We agreed to continue to work collaboratively to ensure that data exchanged under the CRS is of high quality and is used effectively and appropriately in the common fight against tax evasion. CRS information is being exchanged using the Common Transmission System (CTS), the first global, secure bilateral exchange system connecting tax administrations from around the world. The FTA designed, funded and built the CTS and did so on time and on budget. The CTS has substantially reduced costs, enhanced security levels, and eliminated the need for over 5000 bilateral transmission channels. We thank all ofthose involved in this huge collective effort, which we see as a template for future FTA co-operation, and we welcome the Global Forum on Transparency and Exchange of Information’s role in managing the ongoing operation of the CTS.
On BEPS, we welcomed the release of the first six MAP peer review reports under BEPS Action 14 earlier this week. FTA members have further driven forward work under Action 13 and jointly prepared for the first exchanges of CbC reports in June of next year. It is in this context that we have released two handbooks containing practical guidance on how to implement Country-by-County (CbC) reporting and how to make effective use of the information for high level risk assessment purposes, including detailed
examples of dos and don’ts.
On the tax certainty agenda we are moving forward with an ambitious and comprehensive agenda focused on dispute prevention and dispute resolution, supplementing the ongoing work on MAP and CbC, and including:
A new international compliance assurance programme - ICAP. We launched ICAP, a pilot program that uses CbC Reports and other information to facilitate multilateral engagements between MNE groups and participating tax administrations, bringing benefits to taxpayers and tax administrations including improved risk assessment based on fully informed and targeted use of CbCR information, an efficient use of resources, a faster and clearer route to multilateral tax certainty and fewer disputes entering into MAP.
Improved and better co-ordinated risk assessment. The ICAP pilot will be complemented by a new FTA project mapping out jurisdictions’ differing approaches to risk assessment with a view to increasing mutual understanding, closer cooperation and convergence.
More closely integrated international audit activity. A new project will look at how to facilitate greater use of joint audits across jurisdictions, reducing costs for firms and allowing tax administrations to work jointly on the assessment of tax liabilities in cross-border operations, further reducing situations requiring resolution through MAP.
Reducing audit adjustment not sustainable in MAP. Further work will be undertaken in improving and promoting the “Global Awareness Training for International Tax Examiners”.
The Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) has continued to provide a highly effective mechanism for bringing together tax administrations to respond to new global compliance risks and to collaborate on individual cases. The JITSIC work on the Panama Papers has resulted in a better understanding of evasion and avoidance arrangements, especially the role of intermediaries in these arrangements, improved exchange of information practices and an agreed collaborative approach to any future data leaks.
We have released a report on the Shadow Economy, which identifies the latest trends in shadow economy activity, including the rise of labour market crime, and highlights how tax administrations are responding, including through taking whole of government approaches and the use of new technologies such as online cash registers and data matching. As a result of this report, a new project is being launched to obtain and share information from online intermediaries in the sharing and gig economy on payments which might otherwise go untaxed. This project will include discussions with intermediaries including on data aspects such as the format and periodicity of data collection. Finally, tax debt management remains a priority issue for the FTA, with nearly EUR 800 billion of
Finally, tax debt management remains a priority issue for the FTA, with nearly EUR 800 billion of potentially collectible tax debt, and we have launched a new project to identify innovative practices, including the use of behavioural insights, and to learn from best in class. Future of tax administration
Future of tax administration
All FTA members are looking at the opportunities that new technologies, analytical tools and data provide for increasing compliance, improving taxpayer service and reducing burdens. This is a fundamental rather than incremental change and the wider economic benefits can be substantial. We have released a new report on the Changing Tax Compliance Environment and Role of Audit which sets out the scale and scope of the changes taking place in the tax environment and the opportunities and challenges that arise. The digital transformation will continue to be a major focus of FTA work going forward.
Significant change is taking place in FTA member tax administrations, driven by the use of new technologies but also other factors, such as cost reductions and the taking on of new responsibilities. It is against this background, that today we are also pleased to release the Tax Administration Series 2017 which identifies how these shifts are occurring in different tax administrations, including through a large number of country examples, and provides invaluable comparative information to inform tax administrations’ strategies. We also commend the exemplary cooperation with the IMF, CIAT and IOTA in the collection of this data which has now, for the first time, created a set of comparative data on tax administrations covering more than 130 jurisdictions from around the world.
In the critical area of capacity building we took important steps in joining-up the work of individual tax administrations, supporting the Tax Inspectors Without Borders (TIWB) Initiative and in working with other regional tax organisations as well as the Platform for Collaboration on Tax (OECD, IMF, WBG, UN). A new platform has been developed by the Canada Revenue Agency, the Knowledge Sharing Platform (KSP), which allows learning tools and material to be disseminated more easily, and provides a one-stop shop to connect tax officials from around the world.
Finally, the Plenary thanked Edward Troup, Commissioner of the United Kingdom’s HM Revenue & Customs, for the leadership and direction he has shown over the last three years which have seen significant changes in the international tax environment. FTA collaboration is stronger and more effective than ever. The Plenary also welcomed the appointment of the new Chair, Hans Christian Holte, Commissioner of the Norwegian Tax Administration and looked forward to continued co-operation on the
collective opportunities and challenges for tax administrations.