Friday, May 10, 2024

Doctor Ordered To Stay In Jail Until Assets Repatriated To Pay FBAR Penalty

According to Law360A Michigan doctor fighting accusations that he failed to report his foreign bank accounts will stay in jail, as a federal court declined to release him when he didn't comply with an order to deposit over $1 million to cover the judgment against him in U.S. v. Kelly, case number 2:21-cv-12570, in the U.S. District Court for the Eastern District of Michigan.

However, the court will allow James Kelly Jr. to file a brief on the issue of his release from custody and will allow the federal government to respond, according to an order from U.S. District Judge Gershwin A. Drain. Kelly is in jail after the court ruled he was in contempt for failing to comply with a January order to deposit $1.1 million into a bank to cover the penalty for failing to file reports of foreign bank and financial accounts.

The case is back in district court after the Sixth Circuit found in February that Kelly clearly met the standard for willful failure to file FBARs.

The court granted the U.S. government's request for summary judgment against Kelly in May, ruling he had deliberately concealed assets he maintained at Finter Bank in Switzerland without filing the required foreign bank and financial account reports from 2013 to 2015. The court issued an order in October that instructed Kelly to deposit assets in a Michigan bank sufficient to satisfy the outstanding debt of $1.1 million.

The government also filed a motion to garnish Kelly's financial accounts at Huntington National Bank.

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