This story was corrected on July 9, 2013. An explanation follows the story.
Potomac businessman Alexei Iazlovsky pleaded guilty July 1 in federal court in California to filing a false tax return for tax year 2008, diverting a total of $2.6 million of untaxed income, according to court documents.
Iazlovsky, who was born in Russia and became a U.S. citizen in 2002, had an undeclared bank account — held in the name of a foreign corporation — at the Luxembourg branch of an Israeli bank, according to court documents.
Iazlovsky owned a corporation called A&Y Associates Inc. that produced documentaries for Russian television stations. On the advice of tax preparer United Revenue Service Inc., Iazlovsky began keeping money out of the U.S. and diverting payments from his Russian clients to a foreign bank account, according to court documents.
In the last several years, the government has been going after those who, like Iazlovsky, use overseas accounts to avoid paying taxes, said Brian Mahany, a lawyer who specializes in asset protection, fraud recovery and tax issues and writes about these issues on his blog “Due Diligence.”
It is obvious that the government wants him to provide information about his banker and United Revenue Service, Mahany said.
He said the goal isn’t to get Iazlovsky to cough up a million dollars in penalties and fines — it’s to find the accountants, tax preparers, lawyers and bankers who help set up these accounts and evade taxes.
“If one banker spills the beans, you could get one 100 clients,” Mahany said,
Iazlovsky diverted a total of $2.6 million in untaxed payments from his Russian clients to his undeclared bank account in Luxembourg. From 2002 through 2009, Iazlovsky filed false individual and corporate tax returns that did not disclose his bank account in Luxembourg.
Iazlovsky admitted that the taxes he did not pay totaled more than $400,000, according to a Department of Justice press release.
Iazlovsky has agreed to pay a civil penalty in the amount of 50 percent of the high balance of his undeclared account to resolve his civil liability with the IRS. Iazlovsky faces a maximum prison term of three years and a maximum fine of $250,000, according to court documents.
His case was handled in the the U.S. District Court for the Central District of California.
Explanation: The original version incorrectly reported the date of the guilty plea.