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Case 7:18-cv-07910-KMK Document 30 Filed 04/30/20 Page 1 of 30 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK UNITED STATES OF AMERICA, Plaintiff, 18 Civ. 7910 (KMK) -v- HEINZ GENTGES, Defendant. MEMORANDUM OF LAW IN SUPPORT OF THE UNITED STATES OF AMERICA’S MOTION FOR SUMMARY JUDGMENT GEOFFREY S. BERMAN United States Attorney for the Southern District of New York 86 Chambers Street, 3rd Floor New York, New York 10007 Tel.: (212) 637-2677 E-mail: [email protected] SAMUEL DOLINGER Assistant United States Attorney – Of Counsel – Case 7:18-cv-07910-KMK Document 30 Filed 04/30/20 Page 2 of 30 TABLE OF CONTENTS PRELIMINARY STATEMENT .....................................................................................................1 BACKGROUND .............................................................................................................................2 A. Regulatory Background: Required Disclosures of Foreign Financial Accounts Under the BSA .........................................................................................2 B. Factual Background .................................................................................................3 1. The 4959 Account at UBS ...........................................................................4 2. The 4337 Account at UBS ...........................................................................5 3. Gentges’s Withdrawals of Cash from the UBS Accounts ...........................6 4. Gentges’s 2007 Tax Return .........................................................................7 5. Gentges’s Closure of the UBS Accounts .....................................................8 6. IRS’s Examination and Assessment of Civil Penalties ................................9 ARGUMENT .................................................................................................................................10 I. LEGAL STANDARDS .....................................................................................................10 A. Summary Judgment ...............................................................................................10 B. Willful Violations of the BSA’s Foreign Account Disclosure Requirement .........10 II. THE UNDISPUTED EVIDENCE ESTABLISHES THAT HEINZ GENTGES IS LIABLE FOR WILLFULLY FAILING TO DISCLOSE HIS SWISS BANK ACCOUNTS AT UBS .......................................................................................................13 A. Gentges Meets All Threshold Elements of an FBAR Violation ............................13 B. The Evidence Establishes that Gentges’s FBAR Violation Was Willful ..............13 1. Gentges Incorrectly Certified on His Tax Return That He Had No Foreign Financial Accounts in 2007 ..........................................................14 2. Gentges Failed to Consult with Experts Regarding Disclosure Requirements, Tax Implications, or Otherwise with Respect to the UBS Accounts ............................................................................................16 3. Records from Gentges’s UBS Accounts Indicate That His Conduct Was Willful ................................................................................................17 4. Gentges’s Substantial Withdrawals of Cash from His UBS Accounts Demonstrate His Willfulness .....................................................20 III. THE AMOUNT OF THE FBAR PENALTY ASSESSED AGAINST GENTGES WAS PROPER ..................................................................................................................23 CONCLUSION ..............................................................................................................................24 i Case 7:18-cv-07910-KMK Document 30 Filed 04/30/20 Page 3 of 30 TABLE OF AUTHORITIES CASES Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) .................................................................................................................. 10 Anemone v. Metro. Transp. Auth., 629 F.3d 97 (2d Cir. 2011)........................................................................................................ 10 Bedrosian v. United States, 912 F.3d 144 (3d Cir. 2018)...................................................................................................... 11 Brown v. Eli Lilly & Co., 654 F.3d 347 (2d Cir. 2011)...................................................................................................... 10 Celotex Corp. v. Catrett, 477 U.S. 317 (1986) .................................................................................................................. 10 Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) .................................................................................................................. 12 Greer v. Comm’r, 595 F.3d 338 (6th Cir. 2010) .................................................................................................... 14 Gully v. Nat’l Credit Union Admin. Bd., 341 F.3d 155 (2d Cir. 2003)...................................................................................................... 24 Hayman v. Comm’r, 992 F.2d 1256 (2d Cir. 1993).................................................................................................... 14 Karpova v. Snow, 497 F.3d 262 (2d Cir. 2007)...................................................................................................... 24 Kimble v. United States, 141 Fed. Cl. 373 (2018) ................................................................................................ 12, 15, 22 Lefcourt v. United States, 125 F.3d 79 (2d Cir. 1997)........................................................................................................ 11 Matsushita Elec. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) .................................................................................................................. 10 Norman v. United States, 942 F.3d 1111 (Fed. Cir. 2019)..................................................................................... 11, 20, 22 Park v. Comm’r, 25 F.3d 1289 (5th Cir. 1994) .................................................................................................... 14 Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) .................................................................................................................... 11 Shannon v. N.Y.C. Transit Auth., 332 F.3d 95 (2d Cir. 2003)........................................................................................................ 10 ii Case 7:18-cv-07910-KMK Document 30 Filed 04/30/20 Page 4 of 30 Skouras v. United States, 26 F.3d 13 (2d Cir. 1994) ......................................................................................................... 12 United States v. Bohanec, 263 F. Supp. 3d 881 (C.D. Cal. 2016) ................................................................................ 15, 17 United States v. Clemons, No. 18 Civ. 258, 2019 WL 7482218 (M.D. Fla. Oct. 9, 2019) ................................................. 23 United States v. Doherty, 233 F.3d 1275 (11th Cir. 2000) ................................................................................................ 14 United States v. Flume, No. 16 Civ. 73, 2018 WL 4378161 (S.D. Tex. Aug. 22, 2018) ................................................ 23 United States v. Flume, 390 F. Supp. 3d 847 (S.D. Tex. 2019) ................................................................................ 15, 17 United States v. Garrity, 304 F. Supp. 3d 267 (D. Conn. 2018) ................................................................................. 11, 12 United States v. Horowitz, 361 F. Supp. 3d 511 (D. Md. 2019) ................................................................................... passim United States v. Kelley-Hunter, 281 F. Supp. 3d 121 (D.D.C. 2017) .......................................................................................... 12 United States v. McBride, 908 F. Supp. 2d 1186 (D. Utah 2012) ................................................................................ passim United States v. Olbres, 61 F.3d 967 (1st Cir. 1995) ....................................................................................................... 14 United States v. Ott, No. 18 Civ. 12174, 2020 WL 913814 (E.D. Mich. Feb. 26, 2020) .......................................... 17 United States v. Pomerantz, No. 16 Civ. 689, 2017 WL 4418572 (W.D. Wash. Oct. 5, 2017) ............................................ 13 United States v. Rum, No. 17 Civ. 826, 2019 WL 3943250 (M.D. Fla. Aug. 2, 2019) ......................................... passim United States v. Sturman, 951 F.2d 1466 (6th Cir. 1991) ............................................................................................ 12, 14 United States v. Williams, 489 F. App’x 655 (4th Cir. 2012) ........................................................................... 11, 12, 14, 17 United States v. Williams, No. 09 Civ. 437, 2014 WL 3746497 (E.D. Va. June 26, 2014) .......................................... 13, 23 Weinstock v. Columbia Univ., 224 F.3d 33 (2d Cir. 2000)........................................................................................................ 10 iii Case 7:18-cv-07910-KMK Document 30 Filed 04/30/20 Page 5 of 30 STATUTES 5 U.S.C. § 706 ............................................................................................................................... 13 31 U.S.C. § 3717 ......................................................................................................................
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