Unrepentant. That’s how federal prosecutors described Mark Anthony Gyetvay at his sentencing just before District Judge Joan N. Ericksen sentenced him to 86 months in prison for his efforts to conceal assets and income from tax authorities.
Gyetvay was convicted of failing to file a Report of Foreign Bank and Financial Accounts (FBAR), making a false statement to the IRS, and willfully failing to file tax returns. According to court documents and evidence presented at trial, from 2005 to 2015, Gyetvay concealed his ownership and control over substantial offshore assets and did not file tax returns or pay taxes on millions of dollars of income.
Background
According to court documents, Gyetvay, age 66, was born in Orange, New Jersey. He is a U.S. citizen, and also a citizen of Russia and Italy.
Gyetvay graduated from Arizona State University with an accounting degree in 1981. In 1992, he obtained a certified public accountant (CPA) license in Colorado. Eventually, he ended up in Moscow, where he worked for a U.S.-based accounting firm that would ultimately become part of PricewaterhouseCoopers LLP.
In 2003, he became Chief Financial Officer of Novatek, a natural gas company based in Moscow, Russia. Novatek, which appeared as No. 414 on the Forbes 2000 list in 2020, was founded by Leonid Michelson, landing him and his family at No. 73 on Forbes’ billionaires list in 2023.
Swiss Accounts
Beginning in 2005, Gyetvay opened two different accounts at Coutts Bank in Geneva, Switzerland, to hold large sums of money totaling, at one point, over $93 million. Over several years, the government alleged that Gyetvay took steps to conceal ownership and control over these funds, including removing his name from the accounts and making his then-wife, Nadezda Gavrilova, a Russian citizen, the beneficial owner.
In mid-2010, as part of a bank initiative, Coutts Bank advised Gyetvay that he needed to demonstrate that he was complying with U.S. tax reporting requirements. In response, the government claims he closed the accounts and opened new accounts at Hyposwiss, a different Swiss bank. At this point, Gyetvay involved Gavrilova, listing her as the sole beneficial owner of the new accounts. The government claimed that Gyetvay used his wife’s Russian passport and address to avoid U.S. reporting requirements.
Money from the account was used to pay for home renovations for their Naples, Florida residence and purchase art, automobiles, real estate, and investments.
FBARs
As part of the Bank Secrecy Act, every U.S. person with a financial interest in, or signature or other authority over, one or more foreign financial accounts with an aggregate value of more than $10,000 must annually report the account to the Treasury Department. You do this by filing a Report of Foreign Bank and Financial Accounts, commonly known as an FBAR. Failure to report can result in a penalty, depending on whether the failure was willful or non-willful.
Gyetvay did not file FBARs for 2005-2007. He did file FBARs for 2008-2013 years, but he filed late. For 2014, Gyetvay personally prepared and filed an FBAR but did not mention one account and falsely claimed that he had only “signatory” authority over another account when he had an ownership interest.
Income Tax Filings
The feds also allege that Gyetvay—despite his accounting experience—played fast and loose with income tax filings, filing late in multiple years. According to court records, for the 2001 tax year, Gyetvay filed in 2003. For the 2002 and 2003 tax years, Gyetvay filed in 2006. And for the 2004 tax year, he filed in 2007. At trial, the government claims it demonstrated that Gyetvay filed tax returns for 2005 through 2008 that were not only late but were also materially false.
Compliance And Conduct
In 2010, Gyetvay appeared to try to move into compliance. However, the government asserts that this wasn’t due to a change of heart but his desire to clean up his wife’s application for permanent residency with U.S. Immigration authorities. He attempted to explain away years of non-filing by telling his then-new accountant that he had lost his records when he moved. Gyetvay also falsely stated on immigration papers that his total assets were approximately $1.3 million when his Swiss accounts contained over $50 million at the time.
Gyetvay told his accountant that he had only one foreign account with assets over $10,000, citing a bank account in Russia. The accountant advised him to file an FBAR, but Gyetvay declined. He also didn’t timely file his 2011-2013 tax returns—they weren’t filed until 2015.
In 2014, Coutts Bank sent letters to Gyetvay advising that the bank had decided to participate in a Department of Justice disclosure program called the “Swiss Bank Program” (SBP). Under the SBP, Swiss banks that had previously helped U.S. taxpayers hide their assets were required to disclose certain information. As a result, the banks sent warning letters to U.S. clients telling them that the bank would be making disclosures and informing them of IRS offshore disclosure initiatives.
Two IRS disclosure programs were then in existence—the Offshore Voluntary Disclosure Program (OVDP) and Streamlined Procedures.
Under the OVDP, U.S. taxpayers were required to, among other things, file eight years of delinquent tax returns and FBARS and pay all taxes and interest. OVDP participants were also required to pay accuracy-related and delinquency penalties, including failure-to-file and failure-to-pay penalties, and an FBAR penalty that ranged between 27.5% and 50% of the aggregate high balance amount of the unreported accounts. In exchange, taxpayers received a promise from the IRS that they would not be referred for criminal prosecution.
In contrast to OVDP, Streamlined Procedures were only available to taxpayers whose failure to report income and foreign accounts was attributable to non-willful conduct. The reporting obligations and financial penalties were significantly less than those required by OVDP. And Streamlined Procedures filers were not subject to failure-to-file, failure-to-pay, accuracy-related, or information return penalties that would typically apply. Finally, Streamlined Procedures filers were not be subject to civil FBAR penalties. As part of the process, taxpayers were required to certify and explain that their failure to report was attributable to non-willful conduct.
In this case, the government claimed Gyetvay’s failure to report was willful, making him automatically ineligible for the Streamlined Procedures. He was also non-compliant with respect to his income taxes. Gyetvay applied anyway.
Trial
At trial, Gyetvay’s defense team argued that the lawyers and accountants who prepared his Streamlined Procedures submission knew that about the Swiss accounts. Writing in court documents, they claimed, “This is not a case where Mr. Gyetvay was caught by the government. Rather, this is a case where Mr. Gyetvay relied on competent professionals to clean up his foreign account issues and regularize his filings with the IRS. Mr. Gyetvay’s intent to come clean to the IRS in 2014 is clear.”
Indictment And Conviction
On September 21, 2021, a grand jury returned a 15-count indictment charging Gyetvay with a series of crimes involving tax fraud, failure to file tax returns, and failure to file foreign bank account reports. A second superseding indictment largely mirrored the initial indictment. The matter went to trial on March 20, 2023.
According to court documents, following his indictment, Gyetvay told the IRS agents who took him into custody, “This will be the last time you guys will get a f****** dollar from me. Because this is bull****. Total bull****. The amount of taxes I pay.”
The jury convicted Gyetvay on four counts, two misdemeanor counts, and two felony counts. Those charges were failing to file his income tax returns for 2013 and 2014, making a false statement to the IRS, and failing to file an FBAR. He was acquitted on one count of wire fraud. The jury did not reach a verdict on ten of the charged counts.
Sentencing Arguments
The sentencing memo from the government was lengthy. They noted that the loss to the government—$3,284,986 for failing to file in 2013 and 2014—should not be limited to the two counts because the loss calculation must consider “relevant conduct.” Specifically, they argued, referencing United States v. Rhaheed, that “all conduct violating the tax laws should be considered as part of the same course of conduct or common scheme or plan unless the evidence demonstrates that the conduct is clearly unrelated.” In this case, they claimed the evidence overwhelmingly showed that Gyetvay regularly failed to timely file returns, and, when he did file them, he filed materially false returns. As a result, they said the Court should include the tax loss from each year between 2006 and 2014 when calculating his sentence.
The government made a similar argument regarding the failure to file the FBAR. While the conviction was for one year, the failure to file in other years was, they stated, plainly “relevant conduct.” The highest combined value of the unreported accounts was from 2013 when the assets in the accounts were collectively valued at $93,412,774.
Concerning the materially false statement conviction, again, the government argued for sentencing enhancement since the object of the false statement offense “was to perpetuate a fraud on the IRS—by falsely attempting to qualify for the IRS’s Streamlined Procedures and thereby endeavoring to fraudulently evade tax delinquency and FBAR penalties.”
Finally, the government argued that while it’s true that a defendant’s conduct may indicate a brief and isolated lapse in judgment, “this demonstrably is not such a case.” The sentencing memo notes, “For over a decade, the defendant participated in a multi-faceted tax fraud designed to cheat the IRS and hide over $93 million. That cheating involved multiple false statements made under oath on tax returns and other documents. What is more, the four counts of conviction do not come close to representing the full range of the harm caused by the defendant’s criminal activities…”
In contrast, Gyetvay argued that the sentence should be minimal since he filed the returns and paid all of the tax and interest due for these years before the government initiated the investigation—a fact, he says, which the government never contested. He further argued that, despite convictions which would suggest otherwise, he voluntarily came forward to correct his mistakes and bring himself into compliance with the U.S. tax laws.
Sentence And Additional Trial
Gyetvay, who is 66 years old, received a lengthy sentence of 86 months. In addition to prison time, Gyetvay was ordered to serve three years of supervised release, pay a $350,000 fine, and make approximately $4,021,074 in restitution.
Following his conviction, on June 22, 2023, the government filed a civil suit to recover the FBAR penalties for the 2014 tax year. According to the lawsuit, as of June 14, 2023, Gyetvay owes $43,848,545.01, for willful FBAR penalties for 2014, plus accrued interest, failure to pay penalties, and other statutory additions. That case is USA v. Mark Anthony Gyetvay, U.S. District Court, Middle District of Florida (No. 2:23-cv-00452-JLB-KCD).
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