How a Misleading IRS Voluntary Disclosure Led to Indictment

“MIAMI – On March 21, a federal grand jury in Miami returned an indictment charging Dan Rotta, of Aventura, Florida, and Sergio Cernea, of Sao Paolo, Brazil, with conspiring to defraud the United States by concealing income and assets in Swiss bank accounts. The indictment also charged Rotta with tax evasion, filing a false tax return, making a false statement and failing to file Reports of Foreign Bank and Financial Accounts. Rotta was arrested on a related criminal complaint on March 8, 2024.

According to the indictment, between 1985 and 2020, Rotta hid more than $20 million in assets in at least two dozen secret Swiss accounts at five different Swiss banks, including UBS, Credit Suisse, Bank Bonhôte and Bank Julius Baer. The accounts were allegedly held in his own name, in the names of sham structures and, in one instance, a pseudonym. Over the years, Rotta allegedly earned substantial income from these assets that he did not report on his tax returns.

From 2001 through 2017, Rotta allegedly falsely represented to the banks that he was a Brazilian citizen residing in Brazil, even though he had been a naturalized citizen and resident of the U.S. since the 1970s. During those years, Rotta and a company he controlled allegedly received millions of dollars in transfers from his secret Swiss accounts.

Starting in 2008, after it was reported publicly that UBS and its bankers were under criminal investigation for helping U.S. taxpayers evade their taxes, Rotta allegedly took steps to continue concealing his offshore assets, including by closing his UBS account and moving the funds to Credit Suisse and Bank Bonhôte.

According to the indictment, in 2011, after the IRS obtained records related to one of Rotta’s Swiss accounts, Rotta nominally changed the documentation of his accounts at Credit Suisse and Bank Bonhôte to make it appear that Sergio Cernea, a Brazilian national, owned the assets in the accounts. Despite the change, Rotta allegedly continued to control the assets and transferred millions of dollars out of those accounts for his use.

Shortly after Rotta changed the account documentation, the IRS allegedly began auditing Rotta. During the audit, Rotta allegedly falsely denied that he owned the assets in the foreign financial accounts and, instead, claimed that the millions of dollars he withdrew from the accounts were non-taxable loans from Cernea and others. Rotta allegedly provided the IRS with fake promissory notes and false affidavits from Cernea and others to corroborate his claims.

The IRS allegedly did not believe Rotta and assessed millions of dollars of additional taxes as well as penalties and interest against him. According to the indictment, Rotta sought to reverse the assessments by causing the filing of a U.S. Tax Court petition that sought a redetermination of the IRS’s assessments. In that petition, Rotta, through his attorney, allegedly falsely denied having any foreign accounts and attached the fictitious loan documents. Furthermore, Cernea and another co-conspirator allegedly traveled to the United States to retell the false loan story to IRS attorneys. In 2017, after Rotta allegedly presented evidence that the purported loans had been repaid, the IRS reversed the deficiencies and agreed that Rotta owed no additional tax. Unbeknownst to the IRS, however, the funds that Rotta purportedly repaid to Cernea and others allegedly went into accounts that Rotta controlled.

According to the indictment, as part of the conspiracy, in 2016, Rotta had attorneys create trusts in the United States that Cernea funded with the assets transferred from the Swiss accounts and held for the benefit of Rotta. In fact, the funds in the trusts allegedly belonged to Rotta, and Rotta controlled the trusts.

In 2019, Rotta allegedly became aware that the IRS would receive additional account records from Switzerland that contradicted the false claims that he had previously made. To avoid criminal liability, Rotta allegedly applied to participate in the IRS’s voluntary disclosure practice. Under that practice, taxpayers who willfully do not comply with their tax and reporting obligations can make timely, accurate and complete disclosures of their conduct, which may be a way to resolve their non-compliance and limit their criminal exposure. According to the indictment, Rotta made a number of false statements in his submission, including falsely claiming the assets in the Swiss accounts mostly belonged to Cernea and that Cernea was providing Rotta with millions of dollars because Cernea had no children when, in fact, Cernea had two.

If convicted, Rotta and Cernea face a maximum penalty of five years in prison for each count of conspiracy to defraud the United States, tax evasion, failure to file a report of bank and financial accounts and making a false statement. They face a maximum penalty of three years in prison for each count of filing false tax returns and one year in prison for each count of failing to file tax returns. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Markenzy Lapointe for the Southern District of Florida and Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

The International Tax and Financial Crimes group of IRS Criminal Investigation is investigating the case.

Assistant U.S. Attorney Michael Homer for the Southern District of Florida, Senior Litigation Counsels Sean Beaty and Mark Daly, and Trial Attorneys Patrick Elwell and William Montague of the Justice Department’s Tax Division are prosecuting the case.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.”