Stephen M. Kerr and Michael Quiel have been convicted on federal tax evasion charges by a federal jury in Phoenix for filing false individual tax returns in 2007 and 2008. According to the United States Justice Department and Internal Revenue Service, the two venture capitalists did not disclose assets in offshore bank accounts in Switzerland. Stephen Kerr was also convicted of failing to file reports on foreign bank accounts. The men were originally indicted in January of 2012 for trying to defraud the Internal Revenue Service.
According to prosecutors, a San Diego attorney named Christopher M. Rusch helped Kerr and Quiel set up foreign bank accounts to conceal stock ownership, control of stock, and income deposited into the accounts starting in 2004. The federal agencies claim the pair’s assets in those accounts totaled $8.2 million in 2007. During the trial, prosecutors claimed Kerr and Quiel had Rusch transfer money back to the United States through Rusch’s Interest on Lawyer’s Trust Account (IOLTA) before sending the money to the men. That included $2 million that Kerr used to buy a golf course in Erie, Colorado. Rusch pleaded guilty on February 6th to conspiracy to defraud the government and failing to file the foreign bank and financial bank accounts. He also testified at Kerr and Quiel’s trial.
Under federal law, United States citizens are required to disclose taxes on foreign bank accounts of $10,000 or more. Stephen Kerr and Michael Quiel are scheduled to be sentenced in June on tax fraud charges. Christopher Rusch will be sentenced in July.