The long arm of the Internal Revenue Service (IRS) tagged a Dutch tax professional in Italy for return to the U.S. to face charges of tax fraud involving high-net-worth celebrities.
A Dutch citizen, Mr. Frank Butselaar, was arrested in March at his Italian holiday villa. Since then, he has been under house arrest on the charges. Officials rearrested him in July for extradition to the U.S. Opinion is that the U.S. sought his arrest in Italy because of more comfortable extradition agreements between the U.S. and Italy than between the Netherlands and the U.S. But why the fuss?
According to the IRS, Mr. Butselaar advises high-asset clients all over the world. Some of his well-heeled clientele are fashionistas, music industry professionals, and celebrities. The Feds allege Mr. Butselaar developed a method by which his clients concealed assets earned outside of the U.S.—and thus avoid U.S. taxes on the largesse.
As anyone who reads in this space knows, the IRS does not look kindly on those who ignore their duty to report offshore tax holdings and foreign bank accounts. Basically, Mr. Butselaar bought into the shell game. Empty offshore shell companies were created and controlled by family beneficiaries and held by trusts that concealed millions of dollars.
The media identified two of Mr. Butselaar’s clients as Dutch disc jockeys Nick van de Wall (also known as Afrojack) and Tiesto Verwest. Tiesto has an estimated net worth of $170 million, while Afrojack enjoys an estimated $60 million. The two DJs are well-known in EDM circles. Mr. Butselaar is also alleged to have worked with fashion industry personnel, setting up offshore companies to funnel money and avoid taxes.
Noted U.S. Attorney Damian Williams, “As alleged, this defendant and his co-conspirators devised strategies to file false and fraudulent returns with the IRS for U.S. taxpayers of incredible means.”
Interestingly, work on this investigation involved IRS: CI and the Joint Chiefs of Global Tax Enforcement (J5). Mr. Butselaar is charged with one count of conspiracy to defraud, and five counts involving filing false tax returns. Overall, the defendant could be looking at 20 years of prison time—but will likely face less.
With tax defense attorneys already retained, it will be interesting to see what can be achieved through legal negotiation on behalf of Mr. Butselaar—or whether he will go to trial on the charges. Time will tell.
Concerned about offshore tax exposure or underreporting? Speak with an experienced tax attorney
With offices in Cleveland and Chicago, Robert J. Fedor Esq. LLC provides strategic legal representation whether you are under investigation by IRS:CI or identified for a civil audit. When you have tax questions, contact our office or call us at 800-579-0997.
