Vincentian is first person to be convicted for failing to comply with FATCA
September 18, 2018
Vincentian is first person to be convicted for failing to comply with FATCA

United States federal authorities last week secured an historic guilty plea involving Adrian Baron, the former Chief Business Officer and former Chief Executive Officer (CEO) of Loyal Bank Ltd, for failing to comply with the Foreign Account Tax Compliance Act (FATCA).

Baron, 64 is a naturalized Vincentian, he having been granted citizenship in 2015 after arriving in St Vincent and the Grenadines (SVG) in 2006 to take up employment as CEO of Loyal Bank. He is also said to have citizenship in the United Kingdom.

Baron’s guilty plea represents the first-ever conviction for failing to comply with FATCA, a release from the US Department of Justice said on September 11.

When sentenced, Baron faces a maximum of five years in prison.

The U.S. extradited Baron from Hungary in July 2018 after an undercover sting where agents enticed him to use Loyal bank, an off-shore bank with offices in Budapest, Hungary and St Vincent and the Grenadines (SVG), to evade requirements to report the assets of US citizens to their home government or directly to U.S. tax authorities.

According to court documents, in June 2017, “an undercover agent met with Baron and explained that he was a U.S. citizen involved in stock manipulation schemes and was interested in opening multiple corporate bank accounts at Loyal Bank,” according to court documents.

The undercover agent then made it clear to Baron he did not want to appear on or be connected to any of the account opening documents for his bank accounts at Loyal Bank, even though he was adamant he would be the true owner of the accounts.

Baron responded, according to federal prosecutors, that Loyal Bank “could open such accounts and provide debit cards linked to them.”

Roughly a month later, in July 2017, the undercover agent again met with Baron and described “how his stock manipulation scheme operated, including the need to circumvent the IRS’ reporting requirements under FATCA.”

During the meeting, Baron stated that Loyal Bank would not submit a FATCA declaration to regulators unless the paperwork indicated “obvious” U.S. involvement, according to U.S. authorities.
Subsequently, in July and August 2017, Loyal Bank “opened multiple bank accounts for the undercover agent,” according to the DOJ. “At no time did Baron or Loyal Bank request or collect FATCA Information from the undercover agent.”

FATCA is a broad federal law with powerful extraterritorial reach enacted in 2010 requiring foreign financial institutions to identify their U.S. customers and report information about financial accounts held by U.S. taxpayers either directly or through a foreign entity.

The case relied heavily on cooperation with foreign authorities, including the City of London Police; the U.K.’s Financial Conduct Authority and the Hungarian National Bureau of Investigation.

Another Vincentian, Linda Bullock, the former chief executive officer (CEO) of Loyal Bank and a director of Loyal Agency and Trust Corp. was also indicted in this US$50 million international securities fraud and money laundering scheme.