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/ By Yael Segev /
The U.S justice department announced last weekend that Ms. Guilty Kashfi, an Israeli businesswoman and a U.S citizen has agreed to plead guilty to conspiring to defraud the Internal Revenue Service used accounts at two Israeli banks, Bank Leumi Le-Israel Ltd. and Mizrahi Tefahot Bank Ltd, in order to conceal approximately $2.5 million from the Internal Revenue Service.
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Guilty Kashfi was charged in federal court in the Central District of California, and agreed to sign a prosecutor filed a plea agreement
According to the Justice Department statement, Ms. Kashfi held two undeclared bank accounts at both Israeli banks mentioned above. These accounts were held in the names of nominees in order to hide them from the United States authorities. Kashfi also used the accounts to receive “back-to-back” secured loans from one of the Bank’s L.A branch. According to the statement, neither of the foreign accounts, was declared to the IRS.
The Justice Department describes that in 2008, Ms. Kashfi was notified that due to the arrest of one of the first bank’s senior, the bank was going to use the funds in her account in Israel to pay off her back-to-back loans in Los Angeles. However, Kashfi chose not to pay off the loan but instead, she transferred approximately $2 million to the Luxembourg branch of the second bank. By doing so, Kashfi started a new “Back-to-back” loan from the second Israeli bank. Kashfi’s attorney, Ed Robbins, explained that:” she did not want to bring her money back” to the U.S”. In 2009 she decided it was high time she closed her accounts in Luxembourg, but an advice from two local bankers convinced her that her money is saved in the privately owned bank and that her accounts will remain inaccessible. In 2011 Ms. Kashfi had finally closed all her Luxembourg accounts and transferred her funds back to U.S banks.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division said: “Today’s guilty plea is a stark reminder that those who attempt to hide their income and assets from the United States are running out of places to hide”. Ms. Keneally also warned potential tax offenders that” “The Internal Revenue Service will find the hiding places and the Department of Justice will criminally prosecute the tax cheats”.
Kashfi is the second person to plead guilty to conspiring to defraud the United States in connection with back-to-back loans obtained in L.A. , secured by funds in undeclared Israeli bank accounts. In March 29, Zvi Sperling of Beverly Hills pleaded guilty for tax offenses, for tax years 2005 through 2008. Now, both Kashfi and Sperling face a potential maximum prison time of five years and a maximum fine of $250, 000.
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Kashfi, 67, born to a Jewish family in Iran, became an American citizen approximately 15 years ago, after immigrating to the U.S in 1980. .She founded a successful clothing business in L.A, called “Countess of California”, selling a variety of women clothing and fabrics.
