Engineer found guilty of trying to sell military chips to China
zdnet.com
zdnet.com
Funny how it always comes back to taxes, I wonder if that is how they were caught. I'm also curious how he was contacted by that Chinese company. Did he just get an email one day asking for chips in exchange for money?
On a side note, this friend of mine thinks the reason why the President isn't showing his returns isn't because of Russia but because his accountants may have done false filing of some shady business deals and the release of this data will place the President under serious legal troubles.
This is the rationale a lot of laypeople give - but we need to remember the IRS isn't a bunch of laypeople. The entire purpose of the IRS is taxes - more-or-less.
I'm very confident that, by now - particularly with all the "Never Trump'ers" that surely populate some of the offices in the IRS - we'd have heard something tangible. I'm confident people at the IRS have looked into Trump and The Trump Organization's taxes quite a bit by now, and the lack of any "leaks" or public releases from the IRS or its employees really speaks to there not being anything there - other than complicated multi-national corporation taxes.
The act of not letting every Tom, Dick and Harry look at his personal tax filings and selectively choose pieces to misrepresent for political purposes isn't indicative of wrong-doing. I'm surprised it ever became a thing for any politician to do.
Not to mention Trump just became president in 2016... they've had his entire life to review his taxes. Wouldn't there be a whiff of something foul, somewhere, if there was something nefarious going on there?
Other than disliking the guy - is there any evidence there's any "criminal activity" here?
This particular president has been audited for something like 12 years consecutively as I recall. If there were something there to find, it likely would have been found by now.
Except for the fact that there was a particular bank lending to him, the only bank in the world that would lend to him, because American banks would not.
And that bank is currently under investigation for money laundering activities for people in a certain other country; and many of those people have cozy relationships with the government of that country. And Trump is particularly cozy as POTUS with the leader of the government of that country.
So - what if the "other" amounts on his tax returns happen to match up in some way with certain amounts on the books with that bank?
I don't know - I'm not an expert in these matters - but something tells me it wouldn't bode well for Trump, and that might be the reason he's so cagey about his tax returns.
After all - if there were nothing there, he shouldn't really care, right? The fact that he isn't "calling their bluff" speaks volumes...
Or the simple fact that almost nobody are tax experts and almost everybody would like to selectively pick pieces and misrepresent them for political purposes.
What would he gain by releasing them? What would anybody gain by releasing theirs?
Not really, those are qualitatively judged crimes while tax evasion is very empirical. It doesn’t get fairer than that.
When they audit normal people they don't go all in like that. They want their money and it's gonna be hard for you to pay if they destroy your life by putting you in jail.
And in fact, the article mentions the crime that you could be charged with for lying about the source of your income: "making false statements to a government agency".
For many many years as a resident in China, I just reported some numbers on my 1040 with no documentation or explanation about where those numbers came from.
Source?
There’s a bi-weekly process called “314(a) Information Sharing” that’s run by the Treasury Department under the USA PATRIOT Act. It requires financial institutions to pass all kinds of information on to the agencies in the Department - IRS, Secret Service, Customs, ATF, Homeland Security, etc. - who are looking into various matters. All of those agencies are under the same umbrella and they absolutely work together.
A good friend of mine is also a forensic accountant/investigator for the US Attorney’s Office so I know the IRS works closely with the DOJ though I’m not familiar with how that process works in practice.
> IRC 6103(i)(1) provides that, pursuant to court order, return information may be shared with law enforcement agencies for investigation and prosecution of non-tax criminal laws.
They need a warrant, the IRS can’t proactively share tax info with law enforcement agencies for non-tax law reasons.
Unless the US Congress asks for them.
You can still get in trouble for possession of course.
Most states with these kinds of tax stamp laws passed them explicitly to create a new crime to charge people with, not to actually collect any tax revenue. In some cases it provides an excuse to seize property when state law would otherwise prohibit it (they aren't using civil/criminal forfeiture, just seizing property to payoff a tax debt). If you showed up to buy the stamps they wouldn't sell them - some states didn't even bother printing any.
Eventually this was tested in courts and squashed; the courts ruled you can't create an impossible-to-follow law just to catch people. If the law says you have to buy weed stamps then the state must actually sell them. The state also can't use it to entrap you (eg: by requiring you bring the weed to the tax office, then arresting you for possession).
There's a small cottage industry of folks who collect these tax stamps because they're so rarely issued. Most people don't bother buying them so the law still serves its purpose of giving prosecutors more crimes to charge you with.
Which is surely going to happen because people will pay taxes even anonymously, because it's such an enjoyable activity.
USAians in particular looove to pay tax!
(signed: a brit. Who knows nothing of history)
Edit: flippant, but now I can start to see the rationale. Thanks all.
The article states that he was actually the president of the Chinese company that he transferred the chips to: "The scheme was uncovered and investigators realized that Shih was the president of CGTC."
Funny how it always comes back to taxes
These people were rank amateurs. You don't do something in this category of activity, unless you're planning to move back to China and you know the government authorities there will have your back. You don't commit a US federal crime that involves defense secrets, continue to live in the USA, and have that income noticed by the IRS. Also, the payoff needs to be commensurate with the risk. If you're not set for life, you're not doing it right. In fact, if given the opportunity, assume you won't do it right, and just don't do it.
I'm also curious how he was contacted by that Chinese company. Did he just get an email one day asking for chips in exchange for money?
I wonder if there are foreign agents conning US citizens into ex-filtrating sensitive materials and information? The average person would have no way of knowing if someone was using an assumed identity. Such agents could arrange to be out of the country when the deal went down, and certainly by the time the IRS gets involved.
Chinese business practices can sometimes be a bit scofflaw. I know that some Chinese exporters (at least used to) ignore certain procedures and documents, because the US personnel didn't have the manpower to enforce certain regulations, despite the fact that jail sentences could technically result. I'd bet a lot of IoT startup projects have run afoul of those regulations.
There's also a startup culture idea that people should be a "bit naughty" or engage in civil disobedience in the name of disruptive capitalism. That stops when it comes to the interests of the US Defense Department.
Spying ain't what it used to be.
Tax evasion is actually a really clever way to catch for-profit criminals. They don't commit crime just to bury the proceeds in a hole, so they'll inevitably perform easier-to-observe criminal actions when they seek to enjoy their ill-gotten gains.
You can enjoy your ill-gotten gains by proxy. Instead of taking a million and buying a house, you happen to find a great deal on a rental. Or find a company willing to loan you the money to buy a Ferrari at 0.9% interest with no repayment date stipulated.
Obviously this raises suspicions, but it provides enough cover to make tackling your case onerous enough that probably only a really determined and well-funded Federal prosecution team will come after you.
https://www.popehat.com/2013/02/05/crime-whale-sushi-sentenc...