Jailed US doctor used Jersey to dodge tax

James Allen has been sentenced to 30 months’ imprisonment by a court in Pennsylvania for concealing $3m (£2.3m, €2.7m) in income and filing 16 false tax returns.

The anaesthesiologist had already pleaded guilty to the charges in June 2019.

According to the ruling by the department of justice on 16 January 2020, Allen and his wife, who is also a doctor, did not report the income they earned through their jobs to the Internal Revenue Service (IRS).

The couple took additional steps to hide their assets from the US taxman by depositing money in a Jersey-based bank account, transferring money to Colombia to buy a house, purchasing cryptocurrency and gold, and by registering a vehicle in the name of a fake church they set up in Nevada.

It is not clear which bank or financial institution in Jersey was involved.

But, Joe Moynihan, chief executive of the promotional body for the island’s financial services sector, Jersey Finance, told International Adviser: “We can’t comment on individual cases, but banks in Jersey operate under strict due diligence and know your customer rules in line with global standards when it comes to onboarding clients.

“As far as Fatca and CRS are concerned, it is often this commitment to information sharing that uncovers wrongdoing, like falsifying tax returns, and enables authorities to crack down on financial crime.”

Million dollar scheme

The tax evasion took place between 2010 and 2018 and totalled to $902,721.45.

The ruling did not mention the Foreign Accounts Tax Compliance Act (Fatca), which was introduced in 2010 and states that any US citizen has to disclose any foreign or offshore account for tax purposes.

On top of his prison sentence, judge Arthur Schwab ordered Allen to serve a one-year supervised release and handed down a $1,084,658.52 fine.

The avoidance scheme was promoted in a book named ‘Cracking the Code’ written by Peter Hendrickson.

The writer was also convicted of filing false tax returns in 2009 and given a prison sentence.

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