Holocaust defense won't save convicted tax evader from prison

A former watchmaker was sentenced to 10 months in prison for hiding $10 million in offshore accounts.

 
Jack Barouh, 65, of Golden Beach, FL, had been hiding money since 1976 and stashed $6 million of his money with Zurich-based UBS AG, the Jewish Times reported. Barouh, who sold his luxury watch company to Fossil Inc. for $50 million in 2004, is the son of Holocaust survivors, a fact his lawyer used at his sentencing hearing April 23.
 
The lawyer said Barouh's parents, who fled from Austria to Colombia during the Holocaust, taught Barouh to "hide and hoard." He said his client had a compulsion "to establish a secret nest egg," the newspaper reported. Barouh reportedly received psychiatric help for his compulsion.
 
The American Gathering of Holocaust Survivors and their Descendants rejected Barouh's defense, telling Reuters, "Holocaust survivors and their families reject the demeaning assertion that 'survival behavior' learned from the Holocaust could justify illegal evasion of taxes."
 
Although prosecutors asked that Barouh serve 15 months in prison, U.S. District Judge Adalberto Jordan gave him 10 months, saying Barouh cooperated with prosecutors. Barouh pleaded guilty in February to filing a false tax return.
 
Court documents say Barouh set up accounts through Hong Kong, British Virgin Islands, and Panamanian companies. He also had accounts at banks other than UBS, and failed to pay about $736,000 in taxes between 2002 and 2007, the South Florida Business Journal reported.
 
In his plea deal, Barouh agreed to pay a 50 percent penalty for the one year with the highest balance in his offshore accounts, about $10 million. He also agreed to pay additional taxes, interest and penalties.
 
"I am ashamed and embarrassed by my conduct," Barouh told the judge.
 
UBS, one of Switzerland's biggest banks, admitted early last year to helping Americans evade taxes, leading 11 UBS bank customers to plead guilty to tax evasion. Six other clients have been sentenced, Bloomberg News reported. Four got probation or home detention, one got two months in prison, and another received a one-month sentence. The bank paid $780 million in fines.

 

You may like these other stories...

By Cathy Stopyra and Todd SimmensUnderpayment interest, refund interest, and penalties charged to businesses are just a few of the considerations the IRS calculates when determining taxation for a given company. Though...
FASB mulling a revamped income statementDavid M. Katz of CFO wrote on Tuesday that the Financial Accounting Standards Board (FASB) is in the early stages of researching whether to launch a project aimed at improving and...
Renaissance avoided more than $6 billion tax, report saysThe Senate Permanent Subcommittee on Investigations said on Monday that a Renaissance Technologies LLC hedge fund’s investors probably avoided more than $6...

Upcoming CPE Webinars

Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.
Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.