Anchorage surgeon convicted of fraud, tax evasion for hiding millions overseas
On Wednesday, a federal jury found an Anchorage plastic surgeon guilty of wire fraud and tax evasion after he hid assets worth millions of dollars during his divorce.
The trial against Michael Brandner, 67, lasted eight days and resulted in convictions on four counts of wire fraud and three counts of tax evasion. The government called around 30 witnesses and presented more than 300 exhibits.
Brandner was acquitted of two additional counts of wire fraud and prosecutors dropped another before the trial began.
Prosecutors said at the time charges were handed up that Brandner devised a four-year scheme to defraud his wife after she filed for divorce in 2007. He created sham investments overseas, filed false tax returns and misled Internal Revenue Service special agents.
Shortly after the divorce was filed, Brandner moved millions of dollars to Central America by car to hide assets from his wife of 28 years. He left the country without telling friends, family or his workplace, according to the charges.
Brandner deposited $350,000 in cash and 1,000 ounces of gold at a Costa Rican bank, then traveled to Panama, where he opened an account under a sham corporation, Dakota Investments of CA Inc. He deposited $4.8 million into the Dakota account in 2008, said U.S. Assistant Attorney Bryan Schroder in a release.
Brandner told the attorney who represented him during the divorce that he could not convert his Dakota investments into cash until 2013, making them unavailable during the divorce settlement, the charges say.
Meanwhile, he gained interest on the foreign accounts. The government determined he owed an additional $600,000 for two years of unpaid taxes as a result, Schroder said.
“In 2011, Dr. Brandner repatriated over $4.6 million once the divorce was final only to have the funds seized by agents from Homeland Security Investigations. He then lied to federal agents about his control of the funds,” the prosecutor said.
The prosecution expressed concerns about the potential of 50 defense witnesses in a memorandum before the trial started. It appeared Brandner was intending to relitigate his divorce case, they said. But the defense ended up only calling two character witnesses, Schroder said in a phone interview.
Sentencing is set for March 7. Brandner faces a maximum sentence of 95 years and a fine of up to $1.75 million.
“Let this case serve as a warning that the use of offshore schemes and other tax scams to evade tax and other lawful obligations will not be tolerated,” Special Agent in Charge Teri Alexander of Internal Revenue Service Criminal Investigation said in a prepared statement.
