Miami Businessman Charged With Hiding Millions in Swiss Bank Accounts, Evading Taxes

Prosecutors said in Miami federal court Tuesday that Rotta owes $26 million in taxes, interest and penalties dating back to 2001 and has $38.5 million in assets, which are now mostly held in U.S. bank accounts and real estate properties.

Rotta, who was arrested on Saturday at Miami International Airport before a planned flight to Spain, was granted a $15 million bond by a federal magistrate judge—but his bail comes with heavy financial conditions, including a $3 million cash deposit and an agreement to transfer several Florida and New York properties valued at $9 million to the U.S. government if he fails to appear for trial. He also must be confined to his home, surrender his passports and wear an electronic ankle bracelet.

Magistrate Judge Jared Strauss stopped short of granting a request by prosecutors to detain the 77-year-old Rotta after they argued he was a flight risk, noting he has citizenship in his native Romania and Brazil in addition to the United States, where he has lived for more than 50 years. Rotta, who speaks six languages, also owns two luxury apartments in Barcelona.

“He’s a man of the world,” Justice Department attorney Sean Beaty said at Rotta’s detention hearing. “There is nothing truly tying him to Miami anymore.”

Rotta’s defense attorney, Jed Dwyer, with the Greenberg Traurig law firm, said his client has two sons and a daughter living in the United States, stressing that he has returned to Miami from numerous trips overseas knowing he was under federal investigation over the past four years.

“He’s always come back to the Southern District of Florida,” Dwyer said. “He’s not going to flee.”

The judge’s bond decision will be on hold until Thursday, the deadline for prosecutors to file a possible appeal. Rotta’s arraignment is scheduled for March 25.

Set up Swiss accounts with Brazilian cousin: Feds

Rotta, who formerly lived on Fisher Island, made his money as president of a New York City company that imported Seiko watches through the “gray market” and sold them at a discount in the United States. Prosecutors with the Justice Department depicted Rotta as a longtime tax dodger in the criminal complaint filed with his arrest.

In 2008, after UBS and its bankers came under criminal investigation for helping U.S. taxpayers evade paying their taxes, Rotta took steps to hide his holdings by shutting down his account with that bank and moving his funds to Credit Suisse and other Swiss banks, including putting the accounts in the names of other people, according to the complaint.

Three years later, the IRS began auditing Rotta after obtaining evidence of unreported foreign financial accounts. At the time, Rotta falsely denied holding such accounts, but IRS investigators uncovered evidence showing Rotta received transfers of hundreds of thousands of dollars from these foreign accounts that he did not report on his tax returns, prosecutors said, citing the criminal complaint.

Rotta is accused of claiming the transfers were non-taxable loans from third parties, and that a representative of the businessman provided the IRS with “sham loan documents to corroborate his claims,” prosecutors said. To back up his claim, Rotta enlisted his friend and cousin, a Brazilian native listed as a “co-conspirator,” to inform the IRS that he either made or facilitated the loans.

IRS investigators did not believe Rotta and assessed additional taxes as well as penalties and interest against him, prosecutors said. But then in U.S. Tax Court, Rotta filed a petition that “falsely denied having any foreign accounts and attached the fictitious loan documents,” according to a Justice Department news release summarizing the criminal complaint.

In addition, Rotta’s cousin traveled to the United States and retold the false loan story to IRS attorneys, prosecutors said. In 2017, after Rotta offered evidence showing that the purported loans had been repaid, the IRS reversed its earlier decision and agreed that Rotta owed no additional tax. Unbeknownst to the IRS, however, the funds that Rotta purportedly repaid to the third parties went into accounts under his control, prosecutors said,

Aware that the IRS would receive copies of his Swiss bank records, Rotta tried to participate in the IRS’s voluntary disclosure practice two years later. Taxpayers who willfully do not comply with their tax and reporting obligations can make complete disclosures of their conduct as a possible way to resolve their dispute and limit their potential criminal liability, prosecutors said. In his submission, which was signed under penalties of perjury, Rotta made several false statements, prosecutors allege in the criminal complaint.

Not his first run-in with the law

Rotta, if convicted, faces a maximum penalty of five years in prison for a conspiracy charge and another five years for making a false statement charge.

Rotta’s long-running tax dispute is not his first brush with the law.

In 2013, Rotta was found guilty of contempt of court for marrying off his teenage son. That July, a Miami-Dade circuit judge sentenced Rotta to 180 days in jail for allowing his 16-year-old son to get hitched in Las Vegas to his housekeeper’s daughter.

The court had ordered Rotta, then 66, to take his troubled son to a Utah boarding school. Instead, Rotta took his son to Las Vegas for the shotgun wedding, which “emancipated” the teen from the judge’s oversight.

The drama was part of long-running legal disputes stemming from divorce proceedings between Rotta and ex-wife Renee Rotta of Aventura.

Rotta only served nine days in jail before posting a $10,000 bond during his appeal.

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