The case marks the end of a sweeping government crackdown on tax cheats. By Aaron Elstein Photo: Creative Commons Chairman Joi Ito Suzanne Seggerman was one of four siblings to testify against Little. The lawyer who taught New York's first family of tax evasion the tricks of the trade might be spending his golden years in prison. A Manhattan jury last week found Michael Little, 67, guilty of helping the adult children of a Wall Street executive tap into their Swiss bank accounts, which held millions in inheritance money, without alerting the IRS. "Especially at this time of year," U.S. Attorney Geoffrey Berman said, "this case serves as a reminder that failure to pay one's fair share of taxes can result in a felony conviction." The case against Little, who said he might appeal, appears to mark the end of an extensive government crackdown on wealthy families and their advisers who avoided paying taxes by parking money offshore. Federal authorities have charged more than 60 account holders with tax evasion and 30 bankers or lawyers with enabling them during the past eight years. Credit Suisse pleaded guilty in 2014 to helping U.S. citizens conceal accounts and paid a $2.6 billion penalty. Julius Baer, UBS and Israel's Bank Leumi also have paid large fines. Little's troubles began in 2001, when he attended a meeting at the Four Seasons hotel with the children of Harry Seggerman, who'd made his fortune at Fidelity investing in Japanese and later Korean companies. The issue confronting the heirs shortly after their father's death in 2001 was what to do with his $24 million estate, about half of which was tucked away in a Zurich vault. If the heirs declared the money, more than half the funds would go to the taxman. Little advised the Seggermans that they could get their inheritance dollars back into the United States without alerting authorities by taking "little chunks" using travelers checks or disguising transfers by saying they were related to sales of art or jewelry. Little told the heirs "the tax return has to show a certain amount of believability," testified Yvonne Seggerman Beauregard, 62, who acknowledged that the portion of her inheritance that U.S. authorities knew about amounted to $35,000. Her undeclared inheritance came to $1.6 million. Younger brother John Seggerman, a former aide to two Rhode Island senators, wanted to bring his cash back from Switzerland and pay the taxes. Three of his siblings talked him out of that, fearing that disclosing the existence of their hidden fortune would create headaches. "What if the IRS looks back at Dad's earnings throughout his entire career?" testified Seggerman Beauregard, who is general manager of a Spanish-language theater company in Rhode Island. "We would all be liable to pay for years and years of unpaid taxes." Little came into the Seggerman heirs' lives through their father. Before passing the bar in his 50s and becoming a member of Lincoln's Inn, a prestigious group of British lawyers, he ran a brokerage firm in London whose clients included Harry Seggerman. Little also bonded with Seggerman's wife, who, like him, had embraced Catholicism. "They're both religious nuts," testified John Seggerman, 54, whose family brought a certain amount of flair to tax evasion. The siblings used code words when discussing their illicit inheritance. They referred to the IRS as the FDA, called their overseas money "beef" and the accounts that held it "refrigerators." Switzerland was "New Jersey," and Little was "small." In addition to traveling to London to meet someone they knew as Mr. Pink, money was funneled in from overseas through a film-production company 99% owned by the Seggermans' mother, who dreamed of making a movie called Our Lady of Guadalupe starring Mel Gibson. The Swiss slush fund not only helped the Seggermans buff up their lifestyle, but it also helped them avoid other costs. Seggerman Beauregard testified that her children were awarded college financial aid based on false tax returns. She has since paid taxes owed plus a penalty of $766,764 and pleaded guilty to felonies. So has John Seggerman. Also pleading guilty are siblings Suzanne Seggerman, 55, who works in nonprofits, and Henry Seggerman, 65, a money manager and former movie producer. All four testified at trial and await sentencing. Flipped script Little represented himself in court during the trial, putting him in the unusual position of questioning his accusers while they were on the witness stand. In one exchange about the family's criminal activity, which stretched from 2001 to 2009, Little told Seggerman Beauregard, "You [are] attempting to blame me for it today, aren't you?" "No," she replied. "I'm just saying you were a part of it." At the end of the nearly three-week trial, Little took the witness stand and told jurors he relied on tax and accounting experts to handle the family's affairs because he wasn't sophisticated in those matters. "I foolishly ran into a house on fire," he said in closing arguments. But prosecutors were able to cast doubt on that story, showing jurors Little was sophisticated enough to be domiciled in Germany for tax purposes while officially residing in Britain and working most of the time in New York. Assistant U.S. Attorney Christopher DiMase seemed to rattle the defendant by asking why he hadn't paid his own income taxes for years. Little said he didn't think it was necessary because all his earnings had been consumed by the expense of pursuing a patent litigation case for his London brokerage firm. He described it on the stand as "a bet I chose to make." "That's not a business expense, is it, Mr. Little?" DiMase said. "I say it was a bet," Little replied. "I'm agreeing with you in the vernacular. In the commercial sense, it was not a bet." It took jurors less than a day to find Little guilty of all 19 fraud, conspiracy and obstruction charges. He is due to be sentenced Sept. 6. http://www.crainsnewyork.com/article/20180417/FINANCE/180419898
Ungrateful spoiled brats throwing the person who helped them get their dad's stash under the bus. This is WHY you do NOT help someone to do something illegal. The judicial system actually rewards betrayal.