News

Portola Valley man sentenced for tax-evasion

Portola Valley resident Christopher B. Berg was sentenced Feb. 27 to a year and a day in prison after pleading guilty in January 2013 to "willfully failing to file the required report of foreign bank account," according to federal attorneys.

He also must serve three years of "supervised release," said U.S. Attorney Melinda Haag for the Northern District of California in a press release.

Before he was sentenced, he paid restitution to the Internal Revenue Service of more than $250,000 plus a penalty of $287,896, she said.

Mr. Berg, working as a consultant in 2000, set up a secret account at the San Francisco offices of the Swiss bank UBS to shelter a portion of his consulting income from taxation, prosecutors said.

Between 2001 and 2005, he used wire transfers to make deposits of $642,070 in earned income at UBS and used that money in Europe, including for traveling expenses and the purchase of a vehicle, prosecutors said.

Mr. Berg did not inform his accountant about the UBS account nor did he disclose the deposits and income earned on those deposits, the federal attorneys said. The law requires U.S. citizens to disclose the existence of foreign accounts with assets valued at more than $10,000, and any interest in or authority over such accounts.

"The tax harm associated with (Mr.) Berg's conduct exceeded $250,000," prosecutors said.

Investigators from the IRS uncovered the details of the case, and the prosecutors were trial attorneys from the Justice Department Tax Division.

Dave Boyce

Comments

 +   Like this comment
Posted by Vlae Kershner
a resident of Menlo Park: The Willows
on Mar 5, 2014 at 9:44 pm

How can he be sentenced to STATE prison after a federal prosecution?


 +   Like this comment
Posted by what about the bank
a resident of Menlo Park: Downtown
on Mar 5, 2014 at 10:16 pm

How did UBS have no clue that this was dirty money? Why can't the Feds go after them for money laundering?


 +   Like this comment
Posted by Dave Boyce
Almanac staff writer
on Mar 6, 2014 at 9:41 am

Dave Boyce is a registered user.

Thank you, Vlae Kershner, for pointing out the discrepancy. A state prison term included in a federal sentence is indeed incongruous and an error in the story, now corrected.


 +   Like this comment
Posted by Kristin
a resident of Menlo Park: Downtown
on Mar 8, 2014 at 10:41 am

It wasn't dirty money, it wasn't money laundering, it was legal source income that simply wasn't reported. There's a difference.

What I want to know is how did he get nailed for things that happened past the statute of limitations? It sounds like he had to pay tax/penalties for the 2001-2005 income, but civil liability and criminal prosecution is limited to 6 years from the last offense. That puts the cut off in mid 2012. The only thing I can conclude is that either the DOJ got an extension on the SOL which makes you wonder why have an SOL at all, or they got the indictment in before the 2005 SOL expired and then leveraged the tax on the prior years as part of the plea.

The other thing I don't get is how this guy who didn't report $650k got a year in prison when Ty Warner hid $100 mil and got 2 years probation, Mrs. Curran in FL hid 42mil and got 5 mins of probation. It seems to be an inverse correlation. The more you have and the more you hid, the worse your crime, the lower your punishment. That doesn't seem right to me. It seems the guys hiding tens of millions or more should get a much stronger sentence than the ones hiding a few thousand.


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