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US resident risks deportation after tax evasion conviction

Monday, 12 January, 2015

A 73-year-old Italian citizen living in the US has received fines and penalties exceeding USD3 million for failing to report his Swiss bank account.

Gabriel Gabella was a client of UBS during the period 2005-2007 (at least). The value of his unreported accounts for the relevant time period was USD6.3 million. Most of this money came from family inheritances. However, he never declared either the capital or the income received from these to the US Internal Revenue Service (IRS).

The US Internal Revenue Service discovered Gabella's secret accounts in 2009, probably as a result of UBS's enforced cooperation with the US Department of Justice to avoid prosecution for aiding American tax evaders.

Last June, Gabella entered a guilty plea to one count of wilful failure to file a so-called FBAR (report of foreign bank and financial accounts).

He was sentenced last month. The maximum punishment for his offences was five years, but his early guilty plea and full co-operation with the Justice Department precluded a jail sentence. Instead, he received three years' probation and a fine of USD50,000.

However, he has also had to pay a penalty of USD3.1 million, representing half the value of his unreported Swiss account in 2007. This is more than ten times the USD240,000 in taxes he evaded using the Swiss account, for which he must also reimburse the Internal Revenue Service.

Significantly, Gabella's conviction will now be reported to the US Immigration and Customs Enforcement – raising the possibility of deportation, which the US federal government has increasingly used in recent years.

The judge in Gabella's case, Jack Weinstein, stated in his written opinion that he considered the prospect of deportation in Gabella's sentencing, but he did not explicitly recommend it. The decision may have been influenced by Gabella's long-time residence in the US as an urban planner for the United Nations, and by his otherwise clean record.

Sources