NEW YORK (AP) — Bail was set at $2 million and home detention with electronic monitoring was ordered Friday for a British attorney arrested and accused of advising the family of a former top Fidelity Investments executive how to dodge U.S. taxes by hiding millions of dollars overseas.
Michael Little, 61, of Hampshire, England, was likely to remain incarcerated overnight after a U.S. magistrate judge in Manhattan ordered bail secured by at least $1 million in cash or property on the charge of conspiracy to commit tax fraud. The German-born Little, who has a residence in Long Island City, was arrested Thursday night as he arrived at Kennedy International Airport on a flight from London, where he lives with his wife and children.
Assistant U.S. Attorney Stanley Okula said Little engaged in a decade-long tax evasion scheme in which he counseled the family of the late Harry Seggerman how to hide at least $10 million overseas. He called the evidence "compelling, strong." Seggerman died in May 2001. He retired as a vice chairman of Fidelity in 1992.
Okula urged a high bail, saying Little was a flight risk because he had substantial money and ties to the United Kingdom, which has been reluctant in the past to extradite to the U.S. individuals charged with tax crimes.
A lawyer for Little said in court that he had been a lawful permanent resident in the United States for 40 years and was licensed to practice as a lawyer in New York, where he has cases pending, including in the courthouse where he sat, his blue shirt dangling over his pants.
Afterward, another defense attorney, Elkan Abramowitz, emailed a statement, saying: "We are studying the charges contained in the complaint. We are confident that in the end we will be able to demonstrate that there is no merit to any of them."
In court papers, the government said Little met with Seggerman's beneficiaries and descendants at a Manhattan hotel in August 2001 and told them that the patriarch had left them about $10 million of a more than $20 million estate in overseas accounts that had never been declared to U.S. taxing authorities.
The government said Little defrauded the Internal Revenue Service by telling family members how to continue hiding those assets by establishing Swiss bank accounts that would be nominally owned or controlled by Little and a Swiss lawyer.
It said he also advised them that they could bring money back to the United States in "little chunks" through traveler's checks or by disguising money transfers to the United States as being related to the sales of artwork or jewelry.
The government said he transferred some of the money from Switzerland to London, where Seggerman family members could pick up funds during trips there and bring all or part of the money back to the United States as cash, generally in amounts less than $10,000.
To hide communications, members of the Seggerman family used code works in which "small" was used to refer to Michael Little, "beef" meant money, "lbs" meant $1,000 and "FDA" referenced the IRS, the government said.
Suzanne Seggerman in December 2010 pleaded guilty to conspiring to defraud U.S. taxing authorities and subscribing to false individual tax returns.
Her lawyer, Russell Gioiella, said his client "fully cooperated with the government investigation into the overseas accounts left to the family by her father."
IRS Agent Lola Fox said in a criminal complaint that information provided by Suzanne Seggerman had proven to be "highly reliable." She said she also received information from two other members of the Seggerman family, including notes one of them took in various meetings with Little.