Following a yearlong investigation into the alleged tax evasion scheme of billionaire Robert Brackman, reportedly the largest scheme in history, the U.S. Senate Finance Committee released a report detailing its findings on August 26. The report highlights the “shell bank” loophole in the Foreign Account Tax Compliance Act (FATCA) which allows offshore banks to accept U.S. funds without alerting the U.S. Internal Revenue Service (IRS). The report recommends that Congress and the Treasury strengthen the IRS Whistleblower Program in order to better fight tax fraud.
Brockman, who passed away in August, was indicted by the U.S. Department of Justice on 39 counts, including tax evasion, failure to file foreign bank account reports and money laundering. The report claims that Brockman allegedly “used a complex structure involving offshore foreign trusts, foreign and domestic shell companies, nominees and foreign bank accounts to conceal his assets.”
The Finance Committee’s investigation focused on the U.S.’s regulatory shortcomings which allowed this alleged scheme to go undetected for decades. One of the main findings of the report is the “shell bank” loophole in FATCA.
“With little effort, wealthy tax cheats like Robert Brockman are able to convert shell companies into shell banks, and self-certify they are reporting income held in offshore accounts to the IRS. Foreign banks in Switzerland and the Cayman Islands are then exempt from complying with basic FATCA requirements to...
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