(Bloomberg) The arrest of banker Andrew Caspersen on charges of trying to defraud investors of $95 million has prompted his family to try to shed light on the circumstances surrounding his father’s suicide six years ago amid a U.S. tax investigation.
Caspersen’s father was Finn M.W. Caspersen, a financier and philanthropist who ran Beneficial Corp. as his own father had before. Finn Caspersen sold the company in 1998 for almost $9 billion. He shocked his family and friends in 2009 by shooting himself near their Rhode Island estate.
The New York Times reported at the time that Caspersen had kidney cancer and was under federal scrutiny on suspicion of using secret offshore bank accounts to evade taxes. While Caspersen was never charged with a crime, his 39-year-old son’s arrest on March 26 rekindled interest in the father’s conduct.
The Internal Revenue Service scrutiny of the elder Caspersen came when the Justice Department was escalating an investigation of the use of offshore bank accounts to hide assets from the IRS. Since then, Switzerland’s three largest banks have resolved criminal tax cases with the U.S., paying a combined $3.9 billion and admitting how they helped Americans dodge taxes. More than 50,000 U.S. taxpayers disclosed offshore accounts to avoid prosecution.
A two-page letter written in 2015 by an attorney working for the family, and disclosed this week, asserts that the IRS had concluded its investigation of Caspersen by 2013 and assessed only small penalties.
‘Actual Results’
“Notwithstanding uncorroborated media reports to the contrary, this letter details the actual results of this matter,” Chicago tax attorney Denis J. Conlon wrote to Sam Caspersen, one of Andrew’s three brothers, in the letter obtained by Bloomberg News.
Conlon told Sam Caspersen in the letter that the IRS reviewed his father’s tax returns for 2005, 2006, 2007 and 2008 and found he owed no taxes for three of those four years.
Caspersen filed an amended return for 2008, according to the letter. He paid a 20 percent penalty of $12,558 and amended tax of $62,719. His income for the year exceeded $2.7 million, according to the letter, which doesn’t explain the reason for the fine.
The IRS can assess an “accuracy-related” penalty for underpayment of taxes due to “negligence, disregard of rules or regulations, substantial understatement of income tax, and certain valuation misstatements,” according to the agency website.
No Penalty
More significantly, Conlon said the IRS also concluded the elder Caspersen owed no penalty for failure to disclose offshore accounts through a Report of Foreign Bank and Financial Accounts, or FBAR.
A person familiar with the matter said the elder Caspersen had a foreign bank account at LGT Group, a private bank controlled by Liechtenstein’s royal family. The account contained around $1 million, according to the person.
“There was no tax or penalty of any type imposed on any Caspersen trust, entity, or individual,” Conlon wrote on May 18, 2015. “And, absolutely no assets were frozen as part of this investigation.”
While Caspersen was “involved in many domestic and international business transactions,” he was advised by tax accountants and experienced lawyers, Conlon wrote.
After selling Beneficial, Finn M.W. Caspersen then ran Knickerbocker Management, a private investment firm, and he gave millions of dollars to New Jersey Republicans, as well as equestrian and rowing organizations.
Sam Caspersen
Bloomberg obtained the letter through a spokesperson who said he was speaking at the request of Sam Caspersen. The spokesperson, who requested anonymity because of the nature of the charges against Andrew Caspersen, said that he provided the letter because the family was devastated by charges that have unearthed painful memories for them of the father’s death.
A spokesman for the IRS had no immediate comment on the letter. The IRS doesn’t discuss individual taxpayers.
Conlon didn’t immediately respond to phone and e-mail messages seeking comment on the letter. A former IRS official, he is now “of counsel” at law firm Clark Hill in Chicago.
Andrew Caspersen, who worked at PJT Partners Inc., was charged with defrauding the charitable foundation of hedge-fund billionaire Louis Bacon of almost $25 million in an investment scam.
Prosecutors said he fraudulently tried to solicit an additional $20 million from the foundation and $50 million from a private-equity firm.
Caspersen appeared Monday in federal court in Manhattan, where he was released on $5 million bond. The judge also ordered him to undergo alcohol treatment and mental health counseling and evaluation.
