A University of Rochester emeritus professor has pleaded guilty and will pay a $100 million penalty in a tax fraud case.
Dan Horsky, 71, pleaded guilty to conspiring to defraud the United States and to submitting a false expatriation statement. Prosecutors say that Horsky used Swiss bank accounts to invest in startup businesses. Officials say he hid $200 million in assets from the IRS.
Horsky was employed with the University of Rochester as a business administration professor for more than 30 years.
According to the Department of Justice, Horsky began investing in numerous start-up businesses through financial accounts at various offshore banks in 1995. He created Horsky Holdings to hold some of the investments and to hide his financial accounts from the IRS, according to officials.
According to the Department of Justice, Horsky made approximately $80 million from one investment but only paid taxes on $7 million.
“You can’t hide from the IRS,” said U.S. Attorney Boente. “Horsky went to great lengths to hide assets in secret accounts overseas in order to avoid paying his share of taxes to the IRS.”
Horsky faces a maximum sentence of five years in prison. As part of his plea deal, he paid a $100 million penalty. Sentencing is scheduled for Feb. 10.
Statement from University of Rochester:
“The Simon Business School at the University of Rochester fully supports the U.S. Government requirement for all citizens and businesses to pay taxes according to federal law, and educates its students on the importance of upholding ethical business practices and social responsibility.
The University of Rochester and Simon Business School had no knowledge of the situation involving professor emeritus Daniel Horsky, and fully support the judicial process in this case going forward.”
The U.S. has been engaged in a decade-long effort to combat offshore tax evasion by wealthy individuals with legislation, enforcement and incentives for voluntary disclosure.
In 2009, UBS Group AG entered into a deferred prosecution agreement and paid $780 million. In 2014, Credit Suisse Group AG paid $2.6 billion and pleaded guilty to helping Americans file false tax returns.
Congress has also tightened laws on offshore tax avoidance, effectively requiring foreign banks to disclose information to the U.S. government about their U.S. clients.
The IRS announced last month that its voluntary disclosure programs have collected more than $10 billion and brought about 100,000 taxpayers into compliance.