Sovereign Management & Legal LTD is a company that the United States government believes helped U.S. citizens evade their income tax obligations. The U.S. government does not yet know who used the services of Sovereign to move money and assets offshore to hide them from the Internal Revenue Service and avoid paying income taxes that were due. 

A U.S. citizen and Kentucky resident has been indicted for alleged tax evasion. The indictment was recently unsealed and the man who has been charged, Peter Canale, faces a maximum sentence of five years of incarceration. The announcement that the indictment was unsealed was made by the Acting Special Agent for the Internal Revenue Service in New York, as well as by the U.S. attorney for the Southern District of New York. 

Within the United States, 38,000 U.S. citizens have voluntarily come forward to report to the Internal Revenue Service that they had undeclared offshore financial accounts. All U.S. citizens must declare any foreign accounts to the IRS and must pay all taxes that are due on those accounts, as well as on any income earned.  Those who have come forward have paid more than $5.5 billion in back taxes.

The second largest bank in Israel, Bank Leumi, faces millions of dollars in potential penalties as part of a probe into whether the bank helped U.S. investors hide money and avoid paying the full amount of income taxes due to the United States government.

If you have money offshore in a bank in Switzerland, Israel, the Caribbean, Singapore or other countries, your banker and bank may soon be under investigation, if they are not already. The U.S. government is cracking down on tax evasion and they are going after banks and financial professionals with the hope that criminal prosecutions will convince these institutions to turn over customer data. So far, the strategy seems to be working.