A retired business school professor who may have been a customer of Credit Suisse who amassed a $220 million fortune in secret foreign accounts has been sentenced to seven months in prison for conspiring to defraud the fisc of the United States.

For 15 years, according to the US Department of Justice, Prof Dan Horsky, 71, stashed assets and hid income offshore in secret bank accounts. His escapade came to an abrupt end when special agents from the Internal Revenue Service came knocking on his door.

Horsky was born in Israel and used to teach the cream of Swiss banking talent on a Master of Business Administration course organised jointly by the University of Rochester in the State of New York and the University of Bern in Switzerland. According to finews.com, this is the only course in Switzerland through which students can earn an American MBA, which the publication appears to regard as better than a Swiss MBA. Horsky served for more than 30 years as a professor of business administration and is a citizen of the United States, the United Kingdom and Israel.

Beginning in 1995 or thereabouts, Horsky invested in numerous start-up companies, virtually all of which failed. One investment in a business referred to as Company A, however, succeeded spectacularly. In 2000, Horsky transferred his investments into a nominee account in the name of “Horsky Holdings” at an offshore bank in Zurich to conceal his financial transactions and accounts from the Internal Revenue Service (IRS) and the US Treasury.

In 2008, Horsky received approximately $80 million in proceeds from selling Company A’s stock. He sent the IRS a fraudulent tax return for 2008 that under-reported his income by more than $40 million and disclosed only approximately $7 million of his gain from the sale. The Swiss Bank opened many accounts for him that helped him to hide his assets, including one small account for which Horsky admitted that he was a US citizen and resident and another much larger account for which he claimed he was an Israeli citizen and resident. Horsky took some of his gains from selling Company A’s stock and invested in Company B’s stock. By 2015, Horsky’s offshore holdings hidden from the IRS exceeded $220 million.

Bloomberg News is convinced that the Zurich-headquartered bank mentioned anonymously in Horsky's court documents was Credit Suisse. If this is the case, the Swiss private banking giant has already acquired a reputation for facilitating such tax evasion. In May 2014, it pled guilty to conspiracy to help US taxpayers (or non-taxpayers) send off false income tax returns and other documents to the IRS. The Americans had already indicted eight executives as a result of their bank's actions since 2011, with two of them having pled guilty.

Horsky willfully filed fraudulent federal income tax returns that failed to report his income from, and beneficial interest in and control over, his foreign financial accounts. In addition, he failed to file Reports of Foreign Bank and Financial Accounts (FBARs) up to and including 2011, and then filed fraudulent ones for 2012 and 2013. In total, during his 15-year tax evasion scheme, Horsky evaded more than $18 million in income and gift tax liabilities.

In the plea agreement, Credit Suisse promised to pay a total of $2.6 billion - $1.8 billion to the Department of Justice for the U.S. Treasury, $100 million to the Federal Reserve, and $715 million to the New York State Department of Financial Services. Earlier that year, Credit Suisse paid approximately $196 million in 'disgorgement,' interest and penalties to the Securities and Exchange Commission (SEC). When asked to confirm or deny its involvement in the Horsky case, the bank sent Compliance Matters a simple reply: "Please note that we won’t comment."

In addition to his term of imprisonment, Horsky was ordered to serve one year of supervised release and to pay a fine of $250,000. As part of his plea agreement, Horsky also paid a penalty of $100 million dollars to the US Treasury for failing to file, and filing false, FBARs and paid over $13 million in taxes owed to the IRS. Some are denouncing these payments as Horsky's way of avoiding most of the prison time that is his due.
 
The leniency of Horsky's sentence is remarkable. Originally, the prosecutors were asking for between 51 and 71 months' incarceration. Judges in the US, however, no longer have to obey the unconstitutional sentencing guidelines that the Reagan administration illegally imposed on the judiciary in the 1980s. In the cases of Booker and Fanfan in 2005, the Supreme Court declared the guidelines to be advisory and not mandatory.

The prosecutors, whose desires were to be thwarted, originally wrote on 6th February: “While the numbers [we are suggesting] are quite large, they reflect the enormous scope of the crime Horsky committed. By any terms, even after making those payments, the defendant possesses extraordinary wealth. A sentence of incarceration is necessary in order to dispel any indication that one’s freedom can be purchased by paying the government the money it was owed.”

Dozens of other UHNW tax evaders are no doubt breathing a sigh of relative relief at the outcome.