Corporate Corruption Case Charged With Swiss Bank Accounts to Hide the Loot

Corporate Corruption Case Charged With Swiss Bank Accounts to Hide the Loot

According to a DOJ press release here (emphasis supplied by JAT):
Asem Elgawhary, the former principal vice president of Bechtel Corporation and general manager of the Power Generation Engineering and Services Company (PGESCo), was indicted by a grand jury in Maryland on charges that he defrauded his former employers, laundered the proceeds of the fraudulent scheme and violated federal tax laws.
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The eight-count indictment alleges that from 1996 to 2011, Elgawhary, 72, of Maryland, was assigned by Bechtel – a U.S. corporation engaged in engineering, construction and project management – to be the general manager at PGESCo, a joint venture between Bechtel and a state-owned and state-controlled electricity company (EEHC). PGESCo assisted EEHC in identifying possible subcontractors, soliciting bids and awarding contracts to perform power projects for EEHC. The charges allege that Elgawhary used his position at PGESCo to provide preferential treatment to three power companies attempting to secure projects with EEHC in exchange for kickbacks from those power companies and their third-party consultants. The court documents allege that the power companies and their consultants paid more than $5 million in kickbacks into various off-shore bank accounts under the control of Elgawhary, including various Swiss bank accounts. In return, the power companies secured more than $2 billion in lucrative contracts.

This is what I call an atypical offshore account case. The corruption charges (Mail and Wire Fraud and Money Laundering Conspiracy) are the gravamen of the misconduct and really swamp the alleged tax crime. Although, the press release indicates that four years of returns will false information (underreported income) is involved, which could have been charged as tax perjury, apparently the charge is for a single count of tax obstruction, Section 7212(a), here, [enhanced version available to lexis.com subscribers].

View Jack Townsend's opinion in its entirety on the Federal Tax Crimes blog site.

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