Businessman With Secret Accounts Splurged on Lake Worth Beach Real Estate
A U.S. citizen from Croatia bought a $1.6 million Lake Worth Beach home and other real estate with funds from secret offshore accounts.
April 08, 2020 at 04:54 PM
4 minute read
A South Florida businessman pleaded guilty to tax evasion and failing to disclose offshore accounts that bankrolled his lavish lifestyle, including a $1.6 million Lake Worth Beach home and other real estate.
Dusko Bruer is scheduled to be sentenced June 12 by U.S. District Judge Kenneth Marra in West Palm Beach after pleading guilty Friday. Bruer, a U.S. citizen from Croatia, runs an agricultural equipment business that refurbishes and sells farm machinery worldwide.
He was accused of filing in 2018 a fraudulent federal tax return falsely claiming he lived in Dubrovnik, Croatia, and received no income in 2008 even though he received nearly $2.6 million.
Bruer had an interest in accounts with an aggregate value of more than $1.8 million in Croatia, Germany and Switzerland in 2014.
He failed to file the required Report of Foreign Bank or Financial Account with the U.S. Treasury's Financial Crimes Enforcement Network, according to an information filed in January by Assistant U.S. Attorney Aurora Fagan.
Defense attorney Joel Hirschhorn said it's notable Bruer's untaxed income was legitimately obtained either as business revenue or inheritances from well-heeled relatives.
This isn't a case of someone running an underlying criminal enterprise. It's a case of someone who "gave up on life" after a 1997 divorce but has now accepted responsibility and wants to pay what he owes, said Hirschhorn, a criminal and white-collar defense shareholder at GrayRobinson in Miami.
"When you drop out of life for a year or two, it's hard to get back in life. After the divorce, he bought a sailboat, moved to South Florida, sailed in the Caribbean trying to get his life back together. Never did," Hirschhorn said.
A factual proffer signed by Bruer said his company didn't pay him a salary but he diverted revenue to bankroll personal expenses, including $235,000 for a 54-foot Neptunus yacht named Hawk's Nest. He also used $255,000 to buy out a business partner's stake in Serbian real estate and made several six-figure transfers to relatives and business partners.
More than $5.8 million of company revenue was diverted from 2007 to 2011 to his foreign bank accounts in Germany, Croatia, Switzerland and Serbia — all as a way to hide this income from the IRS, the proffer said.
From his account at Serbia's Raiffeisen Bank, Bruer transferred $3.69 million to his Credit Suisse AG account and added another $1.6 million from his company and $2 million from his Raiffeisen account, according to the proffer.
Bruer used money from his Swiss account to make even more lavish purchases, including a $1.35 million, 90-foot yacht named Free Spirit and a $1.6 million 3,200-square-foot Lake Worth Beach home with 100 feet of Intracoastal Waterway frontage. The home title was in someone else's name, but Bruer intermittently lived there, according to the proffer.
Bruer evaded taxes from 2007 to 2017 on more than $7.7 million in income and owed nearly $2.8 million in taxes, according to the proffer.
He started his company in 1988 in Alabama with a partner, and his tax filings were in order until 1999, which was two years after his divorce and South Florida move from Alabama.
Hirschhorn said Bruer inherited some of his money from relatives in Croatia and an aunt lived in New York who left him proceeds from an insurance policy.
Bruer tried to correct things on his own under the IRS's Offshore Voluntary Disclosure Program that allowed taxpayers to voluntarily reveal delinquent taxes, Hirschhorn said.
"Because of what can only be described as a bizarre series of events, either he didn't follow up on the documents needed by the IRS or his lawyer didn't," Hirschhorn said. "His initial conditional acceptance was withdrawn."
The proffer said Bruer opted out of the program because it would cost too much. Instead, he tried to remedy the situation by making "quiet" disclosures that attempted to meet delinquent tax return requirements without actually paying the taxes, according to the proffer.
Since being subpoenaed, Bruer has cooperated with the government and filed back tax returns, according to Hirschhorn. Bruer filed corporate returns for 2014 to 2018 and individual returns for 2014 to 2017 and hoped to file a 2018 return this week.
"That old saying is true," Hirschhorn added. "There's two things you can't beat. Death and taxes."
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