Wegelin & Co. Account Holder Sentenced to Prison Term

On October 30, 2014, a federal judge in Manhattan handed down a three-month prison sentence to an individual who maintained more than $1 million in a secret bank account at Wegelin & Co. in Switzerland.  Viktor Kordash, of Cliffside Park, New Jersey, was also sentenced to 3 years of supervised release and must pay back taxes and penalties of over $1 million.  See United States v. Kordash, No. 14-cr-00345 (S.D.N.Y.).  Kordash had pleaded guilty in May 2014 to willfully failing to file FBARs in connection with his Wegelin & Co. account.  According to the criminal charges, Kordash received cash distributions from his undeclared account at Wegelin and used the account for his antiques business in New York.  Kordash opened the account decades ago, when he was a Russian citizen living in Russia.  He came to the U.S. in 1984, and later became a U.S. citizen.

Wegelin & Co. was the oldest private bank in Switzerland.  In January 2013, the bank pleaded guilty to felony tax charges, thus becoming the first foreign bank to do so.  The bank admitted to conspiring to defraud the United States by helping U.S. account holders hide assets from the IRS in undeclared accounts.  A federal district court also authorized the IRS to issue a “John Doe” summons that allowed the United States to determine the identity of U.S. taxpayers who held accounts at Wegelin and other banks based in Switzerland to evade federal income taxes.