In the instant Motion, Defendant asks the Court to dismiss Count 14. Briefly, the Motion argues that: (1) as of June 30, 2008, the deadline for filing an FBAR for 2007, the law was not sufficiently clear as to whether Defendant was required to file an FBAR reporting his interest in the bank account in Switzerland; and (2) Count 14 requires the Government to prove that Defendant's failure to file an FBAR was "willful" and, because the law was unsettled at the time that the Government contends an FBAR should have been filed, the Government cannot, as a matter of law, prove that Defendant willfully failed to file a 2007 FBAR.
In opposition, the Government argues that it can and will marshal evidence sufficient to prove Defendant's willfulness in failing to file the required FBAR, and points out that Defendant fails to provide any case authority for the proposition that the law surrounding the FBAR filing requirement is too vague to be enforced. The Government submits that it has successfully prosecuted others for FBAR violations and that a challenge to the failure to prove a defendant's willfulness is for appeal and not a matter for pretrial motions.The Court adopts the Government's position. The reasoning was little more than a statement of the Government's position (quoted above), with some citations. Basically, the Court felt that the command to file was clear and that willfulness was a jury issue.
The indictment in the case is here. The key parts of the indictment in terms of the FBAR are as follows:
The Indictment alleges two defraud / Klein conspiracies. The second conspiracy (Count 2) relates to the establishment of the foreign bank account and appears to involve the Defendants James Henry Pflueger ("Pflueger" and Dennis Lawrence Duban. For this Count 2, certain key factual allegations are (avoiding conspiracy jargon):
- The defendants and others created a Cook Island trust named Vista Pacifica Trust for the benefit of Pflieger and "opened a bank account for Vista Pacific Trust, which was located in Switzerland." The bank account was located in Switzerland, not the trust. (Par. 17(1) & (2))
- Certain monies representing property sales proceeds were transferred into the Swiss account; the sales proceeds were not properly reported on tax returns which were thereby false. (Par. 17(3) & (4))
- Pflueger did not file the proper FBAR. (Par. 17(5)).
- Pflueger caused to be filed a trust tax return (Form 1041) for the Trust that represented that the Trust did not have a financial account in a foreign bank. (Par. 18(2)).
- Pflueger and Duban caused fales partnership and individual returns under-reporting the gain described above. (Par. 18(3) & (4)).