Is Paul Manafort Still on the Hook for $3M in FBAR Violations?

Is Paul Manafort Still on the Hook for $3M in FBAR Violations?

Is Paul Manafort Still on the Hook for $3M in FBAR Violations?

Do FBAR Penalties Continue Post-Presidential Pardon

Prior to the former president leaving office, he issued several presidential pardons — including a pardon to Paul Manafort.  Mr. Manafort had been accused of many different violations, including having violated the foreign bank and financial account reporting compliance act.  The US government alleged that Mr. Manafort not only failed to report his foreign accounts to the IRS — but facilitated his tax accountant to mark “No” on Schedule B on questions involving whether or not he has ownership or signature authority over foreign accounts –– when in fact Mr. Manafort had several million dollars stashed abroad. Despite the fact that he was pardoned by the former president, it does not change the fact that the US government is still going after him for penalties stemming from his willful noncompliance with FBAR reporting and compliance. Why? Because the violations are civil in nature and the pardon is for his criminal convictions,

Judgment for Unpaid 2013 FBAR Penalty Pursuant to 31 U.S.C. § 5321) 

      • 36. In 2013, Manafort had a financial interest in or signature authority over at least 18 accounts in Cyprus, one account in the United Kingdom, and three accounts in St. Vincent and the Grenadines, identified in paragraphs 19 and 20, in which the maximum aggregate balance exceeded $10,000. 
      • 37. Manafort was required to report to the United States his interest in these foreign accounts in an FBAR filed on or before June 30, 2014. 
      • 38. Manafort’s failure to report these accounts in a timely-filed FBAR was willful within the meaning of 31 U.S.C. § 5321(a)(5). 
      • 39. Of the 22 accounts identified in paragraphs 19 and 20, nineteen had a zero balance as of June 30, 2014, and two had a balance of less than $200,000. The other account, Loyal 4978, held in the name of Jeunet Ltd. in St. Vincent and the Grenadines, had a balance of $443,594 as of June 30, 2014. 
      • 40. On May 5, 2020, a delegate of the Secretary of the Treasury, in accordance with 31 U.S.C. § 5321, timely assessed against Manafort a penalty for his willful failure to timely file a 2013 FBAR. 
      • 41. This claim is timely because it was filed less than two years from the date of the assessment. 31 U.S.C. § 5321(b)(2). 
      • 42. On July 23, 2020, a delegate of the Secretary of the Treasury sent Manafort notice of the assessment of the 2013 FBAR penalties and demand for payment. 
      • 43. Despite notice and demand for payment, Manafort has failed to pay the penalties assessed against him. As a result, he owes the United States $2,321,797 for the willful FBAR penalty for 2013, plus interest and failure to pay penalty under 31 U.S.C. § 3717, and associated fees. Interest and statutory additions continue to accrue. 

Judgment for Unpaid 2014 FBAR Penalty Pursuant to 31 U.S.C. § 5321

      • 44. In 2014, Manafort had a financial interest in or signature authority over at least three accounts in St. Vincent and the Grenadines, identified above in paragraph 22, in which the aggregate balance exceeded $10,000. 
      • 45. Manafort was required to report to the United States his interest in the foreign accounts in an FBAR filed on or before June 30, 2015. 
      • 46. Manafort’s failure to report these accounts in a timely-filed FBAR was willful within the meaning of 31 U.S.C. § 5321(a)(5). 
      • 47. Each of the three accounts identified in paragraph 22 had a balance of less than $200,000 as of June 30, 2015. 
      • 48. On May 5, 2020, a delegate of the Secretary of the Treasury, in accordance with 31 U.S.C. § 5321, timely assessed against Manafort a penalty for his willful failure to timely file a 2014 FBAR. 
      • 49. This claim is timely because it was filed less than two years from the date of the assessment. 31 U.S.C. § 5321(b)(2). 
      • 50. On July 23, 2020, a delegate of the Secretary of the Treasury sent Manafort notice of the assessment of the 2014 FBAR penalties and demand for payment. 
      • 51. Despite the notice and demand for payment, Manafort failed to pay the penalties assessed against him. As a result, he owes $300,000 for the willful FBAR penalty for 2014, plus interest and a failure to pay penalty under 31 U.S.C. § 3717, and associated fees. Interest and statutory additions continue to accrue. 

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