Michael Little was found guilty in a New York court of taking part in an 11-year tax fraud scheme in which he advised and helped the Seggerman family squirrel away $14m (£10m, €11.4m).
He was also convicted of failing to file his own personal tax returns and assisting in the filing of false tax returns.
The 67-year-old, who is licensed to practice law in New York, was a business associate of the patriarch of the Seggerman family – Harry Seggerman – who started the Fidelity Pacific Fund and retired as vice chair of Fidelity in 1992.
According to the US Department of Justice, after Seggerman died in 2001, Little and a lawyer from Switzerland met with his widow and adult children at a hotel in Manhattan.
They advised the family that the patriarch had left them approximately $14m in overseas accounts that had never been declared to US authorities.
Little and the Swiss lawyer also advised them on steps they could take to continue hiding these assets from the Internal Revenue Service (IRS).
In particular, Little discussed various methods by which they could bring the money into the US while evading detection by the IRS.
Among other means, he said that they could bring money back in small increments, or “little chunks,” through means such as travellers’ cheques, or by disguising money transfers to the US as being related to the sales of artwork or jewellery.
Four of Seggerman’s six children worked with Little and the Swiss lawyer to repatriate the offshore funds.
Little assisted in opening an undeclared Swiss account to hide the widow’s inheritance. He also ordered accountants to prepare false and fraudulent tax returns and to keep falsified records for a corporate entity in the US, controlled by the widow, which was used to receive funds from the Swiss account.
Between 2001 and 2010, Little surreptitiously sent $3m from the undeclared Swiss account to the widow’s corporate entity. He also worked with accountants to establish a sham mortgage that allowed another Seggerman family member to access approximately $600,000 of undeclared funds held in a Swiss account.
Covering his tracks
In or about 2010, Little became aware of an IRS criminal investigation into the scheme. In an attempt to cover up his involvement, Little told the tax lawyer and the accounting firm that the transfers represented “pure gifts” from a non-US person who had “absolutely no relationship” to the widow.
Based on Little’s misrepresentations, the accounting firm filed inaccurate tax returns for the years 2001 through 2010, which categorised the transfers of over $3m to the widow as foreign gifts.
Despite earning a fortune in the US as a green card holder, he failed to file any tax returns with the IRS between 2005 and 2010.
For 2007 through 2010, he further failed to file annual reports of foreign bank and financial accounts in connection with accounts he controlled, which held more than $10,000.
Little, who lives in Hampshire, UK will be sentenced on 6 September 2018.
For their part in the scheme, siblings Henry, Yvonne, John and Suzanne Seggerman have admitted charges related to the evasion scheme and are awaiting sentence pending the outcome of Little’s trial.
Seggerman’s widow Anne and daughters Patricia and Marianne Seggerman were not charged.
