Date: 09-21-2016

Case Style: United States of America v. Saul Hyatt

Case Number: 3:16-cr-00420-FLW

Judge: Freda L. Wolfson

Court: United States District Court for the District of New Jersey

Plaintiff's Attorney: Joseph Mack

Defendant's Attorney: Dennis Kainen

Description: Trenton, NJ - Connecticut man admits conspiracy to conceal income in undeclared panamanian bank account

A Weston, Connecticut, man who used a Panamanian bank account to conceal more than $1.5 million in income from the sale of duty-free alcohol and tobacco products pleaded guilty today to one count of conspiring to conceal assets and income from the IRS, U.S. Attorney Paul J. Fishman and Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division announced.

Saul Hyatt, 53, pleaded guilty before U.S. District Judge Freda L. Wolfson in Trenton federal court to an information charging him with conspiracy to conceal assets in an undeclared bank account held in Panama for his benefit.

“The Panamanian banking system is not a haven to hide profits made from U.S. businesses,” U.S. Attorney Fishman said. “When U.S. taxpayers use foreign bank accounts to hide their assets, we will investigate and prosecute them to the fullest extent of the law.”

“The Department continues to vigorously pursue and prosecute those who conceal their assets and income in offshore accounts in an effort to evade paying their fair share of taxes,” Principal Deputy Assistant Attorney General Ciraolo said. “Nearly eight years after the IRS announced its first offshore voluntary disclosure program, individuals who fail to disclose their interests in foreign accounts and report income earned on these accounts should be well aware that there are significant consequences for this criminal conduct.”

“Concealing income and assets offshore is not tax planning,” Special Agent in Charge Jonathan D. Larsen of IRS-Criminal Investigation, Newark Field Office, said. “Plain and simple, this is international tax fraud. The facts in this case are clear. Mr. Hyatt earned income through the sale of duty-free alcohol and tobacco products and intentionally had over $1.6 million of profits wired into an undeclared offshore bank account in Panama. Today’s plea shows how determined we are at the IRS and Department of Justice in uncovering this type of international tax fraud and putting a stop to it.”

According to documents filed in this case and statements made in court:

Hyatt conspired with another individual in the United States and others to conceal his assets and income derived from the sale of duty-free alcohol and tobacco products. He used a registered Panamanian corporation, Centennial Group, to buy and sell the duty-free products. The alcohol shipped through a customs-bonded warehouse in the Foreign Trade Zone in Fort Lauderdale, Florida. The tobacco products, Chinese-brand cigarettes sold under the names “Chung Hwa” and “Double Happiness,” passed through a customs-bonded warehouse in North Bergen, New Jersey. From 2006 to 2012, Hyatt directed that $1,627,832 in profits from the sale of duty-free alcohol and tobacco products be wired to his undeclared bank account in Panama. Hyatt repatriated money from the Panamanian bank account to buy a Mercedes Benz SL 550R automobile and to pay for $19,000 in interior design goods and services.

Americans are required to report to the IRS on Schedule B of a U.S. Individual Income Tax Return any financial interest in, or signature authority over, a financial account in a foreign country by identifying the country where the account was maintained. They are also required to report all income earned from foreign financial accounts and, if the accounts have an aggregate value of more than $10,000 at any time during the calendar year, file with the Department of the Treasury a Report of Foreign Bank and Financial Accounts (FBAR).

Outcome: The count to which Hyatt pleaded guilty carries a maximum potential penalty of five years in prison and a fine of $250,000 or twice his gain from the offense. Because he failed to file an FBAR report, he is obligated to pay $854,466 in penalties for failing to disclose the account and has agreed to file true and accurate tax returns. He must also pay restitution to the IRS of $521,986. Sentencing is scheduled for Jan. 6, 2017.

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