PHOENIX (Legal Newsline) - Former San Diego attorney Christopher M. Rusch and two Phoenix-area clients have been charged with conspiracy to defraud the Internal Revenue Service.
They are alleged to have concealed millions of dollars in assets in numerous secret Swiss bank accounts held at UBS and elsewhere.
The charges are contained in an indictment returned by a federal grand jury on Dec. 8 which was unsealed on Monday. Kerr and Quiel were each also charged with filing false individual income tax returns for tax years 2007 and 2008 and failing to file Reports of Foreign Bank and Financial Accounts for those same years.
Rusch was arrested Sunday in Miami by federal officers after being deported from Panama by Panamanian authorities at American request. Quiel was also arrested this week in the Phoenix area.
According to the indictment, Kerr and Quiel separately owned and operated a number of businesses. These companies provided financial capital to start-up companies and other services to businesses seeking to become publicly traded through mergers and acquisitions. Rusch was an attorney licensed and practicing in California. Rusch's law practice focused on international business planning, criminal and civil tax defense, international tax, and creating and maintaining offshore structures.
From about 2004 to at least December 2007, Kerr and Quiel obtained control of shares of stock of publicly traded domestic companies in a way that concealed their ownership of the stock. They then deposited the stock, or proceeds from the sale of the stock, to multiple undeclared bank accounts set up with the assistance of Rusch at UBS in Switzerland and at another Swiss bank.
According to the DOJ announcement these accounts "were all held in the names of nominee entities to further conceal Kerr's and Quiel's ownership. Kerr and Quiel also used the accounts to conceal income earned from the subsequent sale of this stock from the IRS." The combined total net assets in 2007of Kerr's accounts exceeded $5.6 million and Quiel's accounts exceeded $2.6 million.
Rusch kept signature authority of the accounts and, with the help of a Swiss account manager and financial intermediary processed the transactions on behalf of Kerr and Quiel.
Furthermore, Rusch maintained his own separate secret offshore accounts, including accounts held in the names of nominee entities at UBS and a Panamanian bank. He utilized his Panamanian entity to assist Kerr in concealing the purchase of a golf course in Colorado with funds transferred from Kerr's secret Swiss accounts. He also utilized his client trust account to transfer funds to Kerr's and Quiel's undeclared Swiss accounts and to repatriate funds back to the United States for the benefit of Kerr and Quiel.
None of the three defendants disclosed the existence of these offshore accounts, or any income earned through these offshore accounts, to the IRS for the years charged in the indictment.
The conspiracy and FBAR charges each carry a maximum potential penalty of five years in prison and a $250,000 fine. The false return charges each carry a maximum potential penalty of three years in prison and a $250,000 fine.