Stanley Moore, a U.S. citizen, forensic accountant, and certified fraud examiner, owned a foreign bank account that he controlled in Switzerland. The highest balance of the account was $900,000 and, at one time, Stanley wired $500,000 from his foreign bank account to a U.S. bank account that he also controlled. He did not report that he had a financial interest in (and signatory authority over) this foreign bank account on Schedule B of Form 1040 for any of the years that he owned the account. Penalties for individuals for failure to report on Schedule B are a maximum of $100,000, imprisonment of not more than 3 years, or both, together with the costs of prosecution. In addition, Stanley did not file a “Report of Foreign Bank and Financial Accounts” (commonly referred to as an FBAR) for any of the years that he owned the account. The FBAR is to be filed annually with the U.S. Department of Treasury when a U.S. citizen or resident alien or non-resident alien has a financial interest in, or signatory authority over, a financial account in a foreign country with an aggregate value of more than $10,000 at any time during a calendar year. For not complying with the law, Stanley faces a civil penalty of $10,000 for each non-willful violation; however, if the violation is found to be willful, the penalty for each violation is the greater of $100,000 or 50 percent of the amount in the account.
The case was investigated by the IRS and resulted in Stanley pleading guilty to willful violation of failure to file an FBAR. He was sentenced to pay $200,000 in penalties and to serve two years imprisonment.
Required
- Does any part of the CFE Code of Professional Standards Interpretation and Guidance of the Association of Certified Fraud Examiners apply in this situation? What type(s) of punishment could the ACFE Board of Regents impose in this situation?