Government Seeks $119.6 Million Judgment in FBAR Penalty Suit

UNITED STATES OF AMERICA,
Plaintiff,
v.
FRANCIS BURGA and FRANCIS BURGA AS THE ADMINISTRATOR OF THE ESTATE OF MARGELUS BURGA,
Defendants.

UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF CALIFORNIA

RICHARD E. ZUCKERMAN
Principal Deputy Assistant Attorney General

AMY MATCHISON (CABN 217022)
Trial Attorney
United States Department of Justice, Tax Division
P.O. Box 683, Ben Franklin Station
Washington, D.C. 20044
Telephone: (202) 307-6422
Fax: (202) 307-0054
E-mail: Amy.T.Matchison@usdoj.gov
Western.Taxcivil@usdoj.gov

DAVID L. ANDERSON
United States Attorney
450 Golden Gate Avenue, 11th Floor
San Francisco, California 94102

Attorneys for United States of America

COMPLAINT

Plaintiff, the United States of America, brings this action to collect unpaid federal penalty assessments and interest as provided by law, and to reduce those assessments to judgment. Additionally, the United States intends to proceed under the Federal Debt Collection Practices Act (28 U.S.C. § 3001 et seq.) to collect any judgment it obtains in this case, including the use of all appropriate pre-judgment remedies, post-judgment remedies, and the additional surcharge as authorized by 28 U.S.C. § 3011. In support of this action, the United States complains and alleges as follows:

INTRODUCTION

1. This is a timely civil action brought by the United States to collect the outstanding unpaid civil penalty assessments (31 U.S.C. § 5321(a)(5)), commonly known as FBAR penalties, made against defendants Francis and Margelus Burga for their failure to report their interest in foreign bank accounts, as required by 31 U.S.C. § 5314 and the implementing regulations promulgated thereunder.

2. This action is brought with the authorization of the Secretary of the Treasury (31 U.S.C. § 3711(g)(4)(C)) and at the direction of the Attorney General of the United States.

DEFENDANTS

3. Defendant Francis Burga is a United States citizen, who currently resides in Santa Clara County, California. Ms. Burga has resided in Santa Clara County since at least 1990, and resided there during the time periods relevant to the civil penalties at issue.

4. Defendant Margelus Burga was a United States citizen, who resided in Santa Clara County, California. Mr. Burga's legal residence was Santa Clara County during the time periods relevant to the civil penalties at issue.

5. Francis and Margelus Burga were married until Margelus died in Janaury 2010. Francis Burga is the Administrator of the Estate of Margelus Burga.

JURISDICTION AND VENUE

6. Jurisdiction over this action is conferred upon this district court by 28 U.S.C. §§ 1331, 1345 and 1355.

7. Venue properly lies in the Northern District of California under 28 U.S.C. § 1391(b)(1) because Ms. Burga resides within the judicial district. Further, venue is proper under 28 U.S.C. § 1391(b)(2) because a substantial part of the events or omissions giving rise to the claim occurred in this judicial district.

INTRADISTRICT ASSIGNMENT

8. A substantial part of the events that gave rise to this action occurred in Santa Clara County, defendants resided in Santa Clara County during the relevant time periods, and Ms. Burga continues to reside there; accordingly, this action can be assigned to the San Jose Division.

FOREIGN BANK OR OTHER FINANCIAL ACCOUNTS

9. 31 U.S.C. § 5314 authorizes the Secretary of the Treasury to require United States persons to report certain transactions with foreign financial agencies. Under the statute's implementing regulations, “[e]ach United States person having a financial interest in, or signature authority over, a bank, securities, or other financial account in a foreign country shall report such relationship” to the Internal Revenue Service (“IRS”) for each year in which such relationship exists. 31 C.F.R. § 1010.350(a).

10. To fulfill this requirement, a person must file a Form TD F 90-22.1, “Report of Foreign Bank and Financial Accounts,” commonly known as an “FBAR.” For the calendar years at issue, an FBAR was due by June 30 “of each calendar year with respect to foreign financial accounts exceeding $10,000 maintained during the previous calendar year.” 31 C.F.R. § 1010.306(c).

11. 31 U.S.C. § 5321(a)(5) provides for the imposition of civil penalties for failure to comply with the reporting requirements of 31 U.S.C. § 5314.

12. Defendants had financial interests in at least 294 foreign bank accounts, in various countries, during at least years 2004 through 2009, as described below:

Name on Account	Country	Bank	Account Number
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX5.027
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX5.034
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX5.041
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX5.058
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX5.065
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX8430
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX9632
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX5582
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AA
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AF
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AG
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AH
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AI
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AJ
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AL
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AM
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AN
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AP
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AQ
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AR
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AS
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AT
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AU
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AV
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AW
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AX
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AY
Accipitor Trading Ltd.	British Virgin Islands	LGT	XXX05AZ
Accipitor Trading Ltd.	British Virgin Islands	UBS (GR)	XXX9.7P Y
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX01/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX88/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX33/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX02/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX34/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX14/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX01/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX88/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX33/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX02/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX14/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX88/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX33/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX02/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX14/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX14/26
Accipitor Trading Ltd.	British Virgin Islands	MAERKI	XXX14/26
Accipitor Trading Ltd.	British Virgin Islands	UBS AG	XXX-0339
Accipitor Trading Ltd.	British Virgin Islands	UBS AG	XXX9.60R
Aljohn Establishment	Liechtenstein	LGT	XXX.024
Aljohn Establishment	Liechtenstein	LGT	XXX8.031
Aljohn Establishment	Liechtenstein	LGT	XXX8.048
Aljohn Establishment	Liechtenstein	HYPO	XXX9101
Aljohn Establishment	Liechtenstein	HYPO	XXX9118
Aljohn Establishment	Liechtenstein	HYPO	XXX9126
Aljohn Establishment	Liechtenstein	HYPO	XXX9134
Aljohn Establishment	Liechtenstein	HYPO	XXX9142
Aljohn Establishment	Liechtenstein	HYPO	XXX9169
Aljohn Establishment	Liechtenstein	HYPO	XXX9177
Aljohn Establishment	Liechtenstein	HYPO	XXX9185
Aljohn Establishment	Liechtenstein	HYPO	XXX9215
Aljohn Establishment	Liechtenstein	HYPO	XXX9223
Aljohn Establishment	Liechtenstein	HYPO	XXX9231
Aljohn Establishment	Liechtenstein	HYPO	XXX9241
Aljohn Establishment	Liechtenstein	HYPO	XXX9258
Aljohn Establishment	Liechtenstein	HYPO	XXX9266
Aljohn Establishment	Liechtenstein	HYPO	XXX9274
Aljohn Establishment	Liechtenstein	HYPO	XXX9282
Aljohn Establishment	Liechtenstein	LGT	XXX0119
Aljohn Establishment	Liechtenstein	LGT	XXX2354
Aljohn Establishment	Liechtenstein	LGT	XXX4062
Aljohn Establishment	Liechtenstein	LGT	XXX68AB
Aljohn Establishment	Liechtenstein	LGT	XXX68AN
Aljohn Establishment	Liechtenstein	LGT	XXX68AP
Aljohn Establishment	Liechtenstein	LGT	XXX68AQ
Aljohn Establishment	Liechtenstein	LGT	XXX68AR
Aljohn Establishment	Liechtenstein	LGT	XXX68AS
Aljohn Establishment	Liechtenstein	LGT	XXX68AT
Aljohn Establishment	Liechtenstein	LGT	XXX68AU
Aljohn Establishment	Liechtenstein	LGT	XXX68AV
Aljohn Establishment	Liechtenstein	LGT	XXX68AW
Aljohn Establishment	Liechtenstein	LGT	XXX68AX
Aljohn Establishment	Liechtenstein	LGT	XXX68AY
Aljohn Establishment	Liechtenstein	LGT	XXX68AZ
Aljohn Establishment	Liechtenstein	LGT	XXX68BA
Aljohn Establishment	Liechtenstein	LGT	XXX68BB
Aljohn Establishment	Liechtenstein	LGT	XXX68BC
Aljohn Establishment	Liechtenstein	LGT	XXX68BD
Aljohn Establishment	Liechtenstein	LGT	XXX68BE
Aljohn Establishment	Liechtenstein	LGT	XXX68BF
Aljohn Establishment	Liechtenstein	LGT	XXX68BG
Aljohn Establishment	Liechtenstein	LGT	XXX68BH
Aljohn Establishment	Liechtenstein	LGT	XXX68BI
Aljohn Establishment	Liechtenstein	LGT	XXX68BJ
Aljohn Establishment	Liechtenstein	LGT	XXX68BK
Aljohn Establishment	Liechtenstein	LGT	XXX68BL
Aljohn Establishment	Liechtenstein	LGT	XXX68BM
Bakewell Assets Ltd.	British Virgin Islands	RB	XXX57.30
Bakewell Assets Ltd.	British Virgin Islands	RB	XXX57.93
Bakewell Assets Ltd.	British Virgin Islands	LGT	XXX6.023
Bakewell Assets Ltd.	British Virgin Islands	LGT	XXX6.030
Bakewell Assets Ltd.	British Virgin Islands	LGT	XXX16AA
Bakewell Assets Ltd.	British Virgin Islands	LGT	XXX16AC
Bakewell Assets Ltd.	British Virgin Islands	LGT	XXX16AD
Bakewell Assets Ltd.	British Virgin Islands	LGT	XXX16AE
Bakewell Assets Ltd.	British Virgin Islands	LGT	XXX16AF
Bakewell Assets Ltd.	British Virgin Islands	LGT	XXX16AG
Bakewell Assets Ltd.	British Virgin Islands	LGT	XXX16AH
Fondation Romphil	Liechtenstein	LGT	XXX31AB
Fondation Romphil	Liechtenstein	LGT	XXX31AL
Fondation Romphil	Liechtenstein	LGT	XXX31AM
Fondation Romphil	Liechtenstein	LGT	XXX31AP
Fondation Romphil	Liechtenstein	LGT	XXX31AQ
Fondation Romphil	Liechtenstein	LGT	XXX31AU
Fondation Romphil	Liechtenstein	LGT	XXX 31BC
Fondation Romphil	Liechtenstein	LGT	XXX 31BD
Fondation Romphil	Liechtenstein	LGT	XXX 31BE
Fondation Romphil	Liechtenstein	LGT	XXX 31BF
Fondation Romphil	Liechtenstein	LGT	XXX 31BG
Fondation Romphil	Liechtenstein	LGT	XXX 31BH
Fondation Romphil	Liechtenstein	LGT	XXX 31BJ
Fondation Romphil	Liechtenstein	LGT	XXX 31BK
Fondation Romphil	Liechtenstein	LGT	XXX 31BL
Fondation Romphil	Liechtenstein	LGT	XXX 31BM
Fondation Romphil	Liechtenstein	LGT	XXX 31BN
Fondation Romphil	Liechtenstein	LGT	XXX 31BP
Fondation Romphil	Liechtenstein	LGT	XXX 31BQ
Fondation Romphil	Liechtenstein	LGT	XXX 31BR
Fondation Romphil	Liechtenstein	LGT	XXX31BS
Fondation Romphil	Liechtenstein	LGT	XXX 31BT
Fondation Romphil	Liechtenstein	LGT	XXX 31BU
Fondation Romphil	Liechtenstein	LGT	XXX 31BX
Fondation Romphil	Liechtenstein	LGT	XXX 31CB
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AA
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AB
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AC
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AD
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AG
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AH
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX17AI
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AJ
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AK
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AN
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AP
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AQ
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 7AS
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AT
Fondation Romphil	Liechtenstein	LGT (SIN)	XXX 17AU
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AA
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AB
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AC
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AF
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AH
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AL
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AM
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AP
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AS
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AT
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AU
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AV
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AW
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AX
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AY
Fondation Romphil Septo PM	Liechtenstein	LGT	XXX 70AZ
Francis Burga	Switzerland	RB	XXX 90.49
Framach Invest AG	Switzerland	RB	XXX 66.90
Framach Invest AG	Switzerland	UBS (GR)	XXX 4.01F
Framach Invest AG	Switzerland	UBS (GR)	XXX 0001
Framach Invest AG	Switzerland	UBS Chur	XXX 54.S1
Framach Invest AG	Switzerland	RB	XXX 6.36/1
Glide/Write Aljohn (S) PTE Ltd.	Singapore	DBS	XXX 4-022
Glide/Write Aljohn (S) PTE Ltd.	Singapore	DBS	XXX 6-022
Glide/Write Aljohn (S) PTE Ltd.	Singapore	DBS	XXX 320-0
Glide/Write Cygnus	Japan	TOKYO	XXX 6549
Glide/Write Cygnus	Japan	TOKYO	XXX 5499
Glide/Write Cygnus	Japan	TOKYO	XXX 6738
Glide/Write Cygnus	Japan	TOKYO	XXX 7048
Glide/Write Cygnus	Japan	TOKYO	XXX 7051
Gobelia Property Inc.	Panama	HYPO	XXX 1019
Gobelia Property Inc.	Panama	HYPO	XXX 1027
Gobelia Property Inc.	Panama	HYPO	XXX 1035
Gobelia Property Inc.	Panama	HYPO	XXX 1043
Gobelia Property Inc.	Panama	MAERKI	XXX 01/26
Gobelia Property Inc.	Panama	MAERKI	XXX 01/26
Gobelia Property Inc.	Panama	MAERKI	XXX33/26
Gobelia Property Inc.	Panama	MAERKI	XXX 14/26
Gobelia Property Inc.	Panama	MAERKI	XXX46/26
Gobelia Property Inc.	Panama	MAERKI	XXX 01/26
Gobelia Property Inc.	Panama	MAERKI	XXX 33/26
Gobelia Property Inc.	Panama	MAERKI	XXX14/26
Gobelia Property Inc.	Panama	MAERKI	XXX 01/26
Gobelia Property Inc.	Panama	MAERKI	XXX 14/26
Gobelia Property Inc.	Panama	MAERKI	XXX 14/26
Gobelia Property Inc.	Panama	MAERKI	XXX14/26
Gobelia Property Inc.	Panama	LGT (SIN)	XXX 97AA
Gobelia Property Inc.	Panama	LGT (SIN)	XXX 97AB
Gobelia Property Inc.	Panama	LGT (SIN)	XXX 97AC
Gobelia Property Inc.	Panama	LGT (SIN)	XXX 97AD
Gobelia Property Inc.	Panama	LGT (SIN)	XXX 97AE
Gobelia Property Inc.	Panama	LGT (SIN)	XXX 97AK
Gobelia Property Inc.	Panama	LGT (SIN)	XXX 97AL
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 01/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 88/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 33/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 02/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 34/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 14/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 01/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX4/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 01/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 14/26
Gobelia Property Inc. Septo	Panama	MAERKI	XXX 14/26
Huritga Int. Holding (S) Pte Ltd	Singapore	DBS	XXX 5-022
Huritga Int. Trading and Fin. Ltd.	Liechtenstein	LGT	XXX 62AC
Huritga Int. Trading and Financint Ltd.	Liechtenstein	HYPO	XXX 4019
Huritga Int. Trading and Financint Ltd.	Liechtenstein	LGT	XXX 2.026
Intervino AG	Liechtenstein	VPB	XXX2.013
Intervino AG	Liechtenstein	VPB	XXX2.999
Jonax International AG	Liechtenstein	B. Pasche	XXX 878_9
Jonax International AG	Liechtenstein	SWISSFIRST	XXX 9.100
Jonax International AG	Liechtenstein	WEGELIN	XXX 9.101
Jonax International AG	Liechtenstein	SWISSFIRST	XXX 9.200
Limoni Real Estate Inc.	Panama	RB	XXX 38.02
Limoni Real Estate Inc.	Panama	RB	XXX 38.26
Limoni Real Estate Inc.	Panama	RB	XXX 38.45
Limoni Real Estate Inc.	Panama	RB	XXX 38.77
Limoni Real Estate Inc.	Panama	RB	XXX 38.80
Limoni Real Estate Inc.	Panama	RB	XXX 38.85
Limoni Real Estate Inc.	Panama	RB	XXX 3000
Limoni Real Estate Inc.	Panama	RB	XXX 3001
Limoni Real Estate Inc.	Panama	RB	XXX 3002
Limoni Real Estate Inc.	Panama	RB	XXX 3003
Limoni Real Estate Inc.	Panama	RB	XXX 3004
Limoni Real Estate Inc.	Panama	RB	XXX 3005
Limoni Real Estate Inc.	Panama	RB	XXX 3006
Limoni Real Estate Inc.	Panama	RB	XXX 3007
Limoni Real Estate Inc.	Panama	RB	XXX 3008
Limoni Real Estate Inc.	Panama	RB	XXX 3010
Long Reign Company Ltd.	China	SCB	XXX 053-1
Long Reign Company Ltd.	China	SCB	XXX 695-4
Luxus Kristall AG	Switzerland	GKB	XXX 0.100
Margelus Burga	Switzerland	RB	XXX 50.17
Margelus Burga	Switzerland	UBS Lugano	XXX 280.0
Margelus Burga	Switzerland	UBS Lugano	XXX 280.1
Margelus Burga	Switzerland	UBS Lugano	XXX 405.0
Margelus Burga	Liechtenstein	LLB	XXX.38
Margelus Burga	Liechtenstein	LLB	XXX 38.57
Margelus Burga	Liechtenstein	LLB	XXX 31.87
Margelus Burga	Switzerland	UBS AG	XXX 280.0
Margelus Burga	Switzerland	UBS AG	XXX 280.1
Margelus Burga	Switzerland	UBS AG	XXX 280.3
Margelus Burga	Switzerland	UBS AG	XXX 280.4
Margelus Burga	Switzerland	UBS AG	XXX 280.5
Margelus Burga	Switzerland	UBS AG	XXX405.0
Margelus Burga	Switzerland	GKB	XXX 2.400
Margelus Burga	Switzerland	GKB	XXX 2.401
Micadema	Liechtenstein	UBS Lugano	XXX 7.60Y
Micadema Stiftung	Liechtenstein	Hypo	XXX 9018
Micadema Stiftung	Liechtenstein	Hypo	XXX 9026
Micadema Stiftung	Liechtenstein	Hypo	XXX 9034
Micadema Stiftung	Liechtenstein	UBS Buchs	XXX 2.01C
Micadema Stiftung	Liechtenstein	UBS Buchs	XXX2.60R
Micadema Stiftung	Liechtenstein	UBS Buchs	XXX 2.61H
Micadema Stiftung	Liechtenstein	UBS Buchs	XXX 2.62G
Micadema Stiftung	Liechtenstein	UBS Buchs	XXX 2.63P
Micadema Stiftung	Liechtenstein	UBS Buchs	XXX 2.M1M
Micadema Stiftung	Liechtenstein	UBS Lugano	XXX 7.03Y
Micadema Stiftung	Liechtenstein	UBS Lugano	XXX 7.61B
Micadema Stiftung	Liechtenstein	UBS Lugano	XXX 7.62E
Micadema Stiftung	Liechtenstein	UBS Lugano	XXX 7.63M
Red Sun Financial Business S.A.	Panama	RB	XXX 10.05
Red Sun Financial Business S.A.	Panama	RB	XXX 10.09
Rixmat Asia Pte. Ltd.	Singapore	OCBC	XXX 6301
Rixmat Asia Pte. Ltd.	Singapore	OCBC	XXX 1001
Tembrix AG	Switzerland	UBS Chur	XXX 7.01Q
Tembrix AG	Switzerland	UBS Chur	XXX 7.03B
Tembrix AG	Switzerland	UBS Chur	XXX 7.60B
Tembrix AG	Switzerland	UBS Chur	XXX 7.61E
Tembrix AG	Switzerland	CREDIT S	XXX 40-81
Tembrix AG	Switzerland	MAERKI	XXX 01/26
Tembrix AG	Switzerland	MAERKI	XXX 33/26
Tembrix AG	Switzerland	MAERKI	XXX 14/26
Tembrix AG	Switzerland	MAERKI	XXX 33/26
Tembrix AG	Switzerland	MAERKI	XXX 14/26
Tembrix AG	Switzerland	MAERKI	XXX 33/26
Tembrix AG	Switzerland	MAERKI	XXX 14/26
Tembrix AG	Switzerland	MAERKI	XXX 33/26
Tembrix AG	Switzerland	MAERKI	XXX 14/26
Tembrix AG	Switzerland	MAERKI	XXX 33/26
Tembrix AG	Switzerland	MAERKI	XXX 14/26
Tru Lieu/GW Vietnam Co. Ltd.	Vietnam	ANZ	XXX 9504
Tru Lieu/GW Vietnam Co. Ltd.	Vietnam	ANZ	XXX 8634
Tru Lieu/GW Vietnam Co. Ltd.	Vietnam	BIDV	XXX 6417
Tru Lieu/GW Vietnam Co. Ltd.	Vietnam	BIDV	XXX 4105
Tru Lieu/GW Vietnam Co. Ltd.	Vietnam	BIDV	XXX 4488
Bank Abbreviations LGT = Liechtenstein Global Trust DBS = Development Bank of Singapore Limited Maerki = Maerki Baumann & Co. AG HYPO = Hypo Alpe-Adria-Bank International renamed as Heta Asset Resolution. RB = Raiffeisen Zentralbank Österreich AG UBS Branches: UBS Chur, UBS Buchs, UBS Lugano, UBS AG based in Zurich & Basel BIDV = Joint Stock Commercial Bank for Investment and Development of Vietnam Swissfirst = Swissfirst AG, in December 2006 bought by Bellevue Group AG Wegelin = Wegelin & Co. was sold to the Raiffeisen Banking Group. ANZ = Australia and New Zealand Banking Group Limited OCBC = Oversea-Chinese Banking Corporation Singapore Credit S = Credit Suisse Group VPB = VP Bank AG LLB = (Liechtensteinische Landesbank) National Bank of Liechtenstein GKB = Graubundner Kantonalbank SCB = Standard Chartered Bank (Hong Kong) Limited Tokyo = Bank of Tokyo-Mitsubishi (MUFG) B Pasche = Banque Pasche SA

13. For each of the years 2004 through 2009, the aggregate amounts in the accounts listed in paragraph 12 above, exceeded $10,000 in U.S. currency.

14. Defendants were required by law to file FBARs reporting their financial interest in the accounts listed in paragraph 12 above, for the years 2004 through 2009, as well as any other year that satisfied the FBAR reporting requirements.

15. Defendants did not file FBARs that disclosed the accounts listed in paragraph 12 above, for the years 2004 through 2009.

Willful Failure to File FBARs

Francis Burga

16. Before moving to the United States, Ms. Burga obtained a nursing degree while in her native country the Philippines. In 1974, Ms. Burga also earned an undergraduate degree in business management from Mesa College in San Diego, California.

17. From 1972 through 1982, Ms. Burga worked at National Micronetics, which made magnetic head/wafer assemblies for computers. Ms. Burga was promoted quickly at National Micronetics, having started doing computer assembly and inspection work, she was promoted to Supervisor of Research and Development, then became the Supervisor of the Advance Manufacturing Department, was then promoted to Coordinator of Sales, Engineering and Manufacturing and was ultimately named Manager of Sales, Engineering and Manufacturing.

18. In 1982, with two colleagues from National Micronetics, she co-founded Magnebit Corporation. Magnebit supplied magnetic heads and test heads to computer manufacturers. Ms. Burga was the Vice President and Director of Manufacturing and Sales for Magnebit until it was bought out in late 1988.

Margelus Burga

19. Mr. Burga was a naturalized U.S. citizen born in Romania. He was a mechanical engineer with two Masters of Science degrees, one from the University of Bucharest and the other from Santa Clara University.

20. In 1988, Mr. Burga founded Marburg Technologies, Inc. Marburg also does business as Glide/Write (Glide/Write USA). Marburg designs and manufactures precision components and assemblies for the data storage industry.

21. Between 1997-2000, Margelus Burga and his brother Alexander Burga filed for eight glide head related patents in the United States. The patents were granted between 1997 and 2003 and were commercially exploited by Marburg.

Mr. and Ms. Burga

22. In 1989, Mr. Burga offered Ms. Burga a job with Marburg, which she declined. In early 1990, Mr. Burga again offered Ms. Burga a job and an ownership interest in Marburg d.b.a. Glide/Write USA. She accepted his second job offer and was given the title of Vice President of Manufacturing and Sales.

23. In 1992, Ms. Burga assumed two corporate officer positions for Marburg: Treasurer and Secretary.

24. On December 24, 1991, Alexander Burga was born to Mr. and Ms. Burga. Their second son, Jonathan Burga, followed on February 27, 1993.

25. On July 25, 1995, Mr. Burga and Ms. Burga were married.

Foreign Bank Accounts and Entities

26. In October 1993, the Burgas traveled to Lugano, Switzerland. While there, they opened a joint bank account with the Swiss Bank Corporation (which later reorganized and was renamed Union Bank of Switzerland, or UBS).

27. Mr. and Ms. Burga used their U.S. passports to open their UBS account and requested that the bank retain all mail from the account. Both Mr. and Ms. Burga signed the opening documents for the account and each had the unrestricted right to dispose of the account's assets.

28. In 1994, Mr. and Ms. Burga established Accipitor Trading Ltd. in the British Virgin Islands.

29. In May of 1995, Mr. and Ms. Burga traveled to Vaduz, Liechtenstein. While there, they met with financial advisor Peter Meier at Liechtenstein Global Trust.

30. The Burgas expressed to Mr. Meier their desire to set up a company in Liechtenstein to organize the Asian sales of Glide/Write outside of the United States. The Burgas also expressed to Mr. Meier that it was important to them to build and protect a fortune outside of the United States and then to later obtain residency in Switzerland.

31. At the Burgas' request, Mr. Meier developed a solution that would allow the Burgas to keep their foreign profits outside the United States. Initially, Mr. Meier set up a company, which he managed, to receive the profits of the Burgas' Asian operations.

32. As the profits grew rapidly, Mr. Meier suggested the creation of a Liechtenstein stiftung (stiftung translates into English as a “foundation,” but is treated as a trust for U.S. tax purposes).

33. In 1996, Romphil Foundation, a Liechtenstein stiftung, was created for the Burgas. Romphil is a combination of the names of Mr. and Ms. Burga's native countries, Romania and the Philippines.

34. The Burgas installed Mr. Meier as the Trustee and Director of the Romphil Foundation, while retaining control over Romphil by appointing Mr. Burga founder and beneficial owner and Ms. Burga as a secondary beneficiary.

35. The Burgas used Romphil to create a complex structure that grew to include at least 25 tiered entities based in Liechtenstein, Switzerland, Singapore, and other European and Asian countries. Those entities have thus far been identified as follows:

(a) Accipitor — created in the British Virgin Islands in 1994. In 1998, Accipitor purchased two properties on Sobey Road in Saratoga, California, which were used by the Burgas as their personal residence, for $2.9 million from Glide/Write USA.

(b) Aljohn Establishment — created in Liechtenstein for the Burgas in 1995. Aljohn is a combination of the names of Mr. and Ms. Burga's sons, Alexander and Jonathan.

(c) B&L Group, AG — incorporated in Switzerland in 2010, owns Golden Café and Hotel Krone.

(d) Bakewell Assets — founded in the British Virgin Islands in 1998, functions as a holding company. Mr. Meier, and both Burgas are named as members of the Board with signatory authority.

(e) Framach Investment AG — incorporated in Switzerland in 2007, holds property.

(f) Georgilo Assoc. — incorporated in the British Virgin Islands in 2007, its purpose is unknown.

(g) Gobellia — incorporated in Panama in 2008, functions as a holding company.

(h) Golden Café Central, AG — incorporated in Switzerland in 2010, provides gastronomy services in Switzerland and holds ownership of Hotel Krone assets.

(i) Glide/Write Cygnus Corporation — incorporated in Japan in 2002, provides sales, commissions, trading, and agent services for distribution of computer hardware in Japan. It is believed to be a shell company — that is an entity that has no active business and exists only in name as a vehicle for another company's business operations.

(j) Glide/Write Singapore — incorporated in Singapore in 1997, provides sales, commissions, trading, and agent services for distribution of computer hardware in Singapore. It is believed to be a shell company.

(k) Hotel Krone, AG — incorporated in Switzerland in 2010, provides gastronomy services in Switzerland.

(l) Huritiga International, Singapore — incorporated in 2008, owns 100% of the stock of Ahead Magnetics, Inc. (like Glide/Write USA, Ahead Magnetics markets precision components and assemblies for data storage and retrieval to large hard drive manufacturers. Ahead Magnetics is one of three domestic corporations owned and operated by Mr. and Ms. Burga through their offshore entities.)

(m) Huritiga International Trading and Financing Limited — incorporated in Liechtenstein in 1999, 100% shareholder of Huritiga International, Singapore.

(n) Intervino AG — incorporated in Liechtenstein in 1989, owns 100% of Sta. Agricola Rosoretto

(o) Jonax International Aktienesllschaft — incorporated in Liechtenstein in 2001, owns the Burgas' automobiles.

(p) Limoni Properties — incorporated in Panama in 2008, functions as a holding company.

(q) Long Reign — incorporated in Hong Kong in 1997, provides sales, commissions, trading, and agent services for distribution of computer hardware in China. It is believed to be a shell company. Long Reign processed payments between Glide/Write USA and Tru Lieu. By 2012, Long Reign paid $1.7 million in dividends to its parent company Red Sun. Of the dividends paid to Red Sun, almost $1 million was then paid to Ms. Burga in the form of three separate interest-free loans.

(r) Luxury Swiss SA — founded in Switzerland, it is believed to be closed.

(s) Luxus Kristal, AG — incorporated in Switzerland in 2008, manufactures household tiles.

(t) Red Sun — incorporated in Panama in 2002, functions as a holding company.

(u) Rixmat Asia — incorporated in Singapore in 2009, provides sales, commissions, trading, and agent services for distribution of computer hardware in Singapore. It is believed to be a shell company.

(v) Sewitech, AG — incorporated in Switzerland in 2002, manufactures lawnmowers.

(w) Sta. Agricola Rosoretto, SRI — incorporated in Italy in 2010, operates a winery in Italy and holds the Italian home of the Burgas.

(x) Tembrix, AG — incorporated in Switzerland in 1988. In 1998, Tembrix purchased Glide/Write USA for $4 million and then loaned Glide/Write USA $10 million to cover operating shortfalls.

(y) Tru Lieu — founded in Vietnam in 2003, manufactures computer hardware and is also known as Glide/Write Vietnam.

36. During the years at issue and using the accounts described in paragraph 12 above, the Burgas continued a false invoicing scheme created by Mr. Meier to divert the offshore profits from their computer hardware business to some of their offshore entities described in paragraph 35 above.

37. From 2001 through 2009, Ms. Burga was the Vice President of Sales for Glide/Write and after the death of her husband in 2010, she became the President. In both positions, she was the starting point in the false invoicing scheme which operated as follows:

(a) Ms. Burga would negotiate sales on behalf of Glide/Write USA with third-party customers such as Seagate, Fuji, and Showa Denko, located in Asia.

(b) The Asian customers were instructed to send their purchase orders to Glide/Write Singapore or Glide/Write Japan.

(c) Glide/Write Japan would translate the purchase orders into English and then send them to Glide/Write USA and Glide/Write Singapore.

(d) Glide/Write Singapore would create a new purchase order for Glide/Write USA showing Ingenieruburo Koch Anstalt (IKA is an entity owned by Andreas Koch, a Liechtenstein citizen and friend of the Burgas) as the customer (instead of Seagate, Fuji, or Showa Denko, for example) and reflect a price substantially less than the one the actual customer's purchase order reflected.

(e) Glide/Write USA would record the IKA purchase order reflecting the reduced price. It would then manufacture the products and ship them to either the actual customer directly or to Glide/Write Japan or Glide/Write Singapore.

(f) Glide/Write Japan would pay Glide/Write Singapore for all products purchased from Glide/Write USA.

(g) Glide/Write Singapore would then pay IKA an amount roughly equal to 99% of the amount of the actual customer purchase order.

(h) IKA would then pay Glide/Write USA the reduced amount reflected on the purchase order created by Glide/Write Singapore.

(i) IKA would pay the balance, roughly 50%, to Aljohn as a “commission.”

38. The scheme can be illustrated as follows:

(a) Ms. Burga sells 100 parts to Showa Denko for $150.

(b) Denko sends its order to Glide/Write Japan.

(c) Glide/Write Japan would send a purchase order for 100 parts to Glide/Write Singapore and a purchase order for 100 parts to Glide/Write USA.

(d) Glide/Write USA would take its purchase order and build 100 parts.

(e) Glide/Write Singapore would then send a second purchase order to Glide/Write USA showing IKA ordered 100 parts for a reduced price of $75.

(f) Glide/Write USA would record the IKA purchase order and ship 100 parts to Glide/Write Japan.

(g) Glide/Write Japan would ship all the parts to Denko.

(h) Glide/Write Singapore would then send $75 to Glide/Write USA and $74 to IKA.

(i) Glide/Write Singapore would keep $1 for its “fee.”

(j) The $74 would be diverted and deposited in an offshore account.

39. In 2001, Mr. and Ms. Burga both executed a Form A, affirming that they were the beneficial owners of the UBS account they opened in October 1993 (see ¶ 26).

40. On June 21, 2002, Mr. and Ms. Burga signed a “Supplement for New Account US Status,” which indicated to UBS that they were U.S. persons liable for tax in the United States.

41. Mr. and Ms. Burga signed a second “Supplement for New Account US Status” on July 14, 2006. That same day both also executed documents waiving their right to invest in U.S. securities.

42. Notwithstanding these actions, both failed to disclose their joint bank account on Schedule B of their federal income tax returns between 1995 and 2009.

43. On August 7, 2007, at the beginning of a civil tax examination of the Burgas' federal income tax returns, the IRS interviewed Mr. Burga.

44. During that interview, Mr. Burga told the IRS Revenue Agent conducting the interview that he and Ms. Burga did not have any foreign bank accounts, that they did not own any foreign corporations, and that they did not have any trusts. Mr. Burga even went so far as to say that he understood that trusts were used to avoid paying taxes.

45. After his interview with the IRS but still on August 7, 2007, Mr. Burga caused to be transferred all of the funds, more than $6 million, out of the Burgas' joint UBS account and into Micadema stifutung.

46. Micadema stiftung had been created in 2007 in Liechtenstein with Mr. Burga as the founder and beneficial owner.

47. On August 27, 2007, Ms. Burga, who at the time was known as Ms. Guevara, was designated as successor protector of Micadema.

48. On December 18, 2008, the Burgas closed the Romphil stiftung and transferred over $100 million in assets (as well as Tembrix, Accipitor, and Aljohn) to a new stiftung in Liechtenstein, Marfran. Marfran is a combination of the Burgas' first names, Margelus and Francis.

CLAIM FOR RELIEF: JUDGMENT FOR CIVIL PENALTIES (31 U.S.C. § 5321(a)(5))

Liability for Civil Penalties

49. During the years 2004 through 2009, defendants Mr. Burga and Ms. Burga were United States persons within the meaning of 31 C.F.R. § 1010.350(b).

50. During the years 2004 through 2009, defendants had financial interests, within the meaning of 31 C.F.R. § 1010.350(e), over the accounts described in paragraph 12 above.

51. The accounts described in paragraph 12 above are each a bank account in a foreign country.

52. During the years 2004 through 2009, the aggregate balance in all bank accounts exceeded $10,000.

53. Defendants failed to file an FBAR identifying their financial interest in the accounts described in paragraph 12 above, with regard to the 2004 through 2009 years, as required by 31 U.S.C. § 5314 and 31 C.F.R. § 1010.306(c).

54. The failure of defendants to timely file, and/or properly identify all of the foreign accounts in which they held a financial interest with regard to the 2004 through 2009 calendar years was willful within the meaning of 31 U.S.C. § 5321(a)(5).

55. Ms. Burga has admitted that Mr. Burga is liable for the civil FBAR penalties assessed.

Assessment and Collection of the Civil Penalties

56. On about June 13, 2017, a delegate of the Secretary of the Treasury timely assessed civil penalties against each Margelus Burga and Francis Burga in the amount of $52,581,605, due to their willful failure to timely file FBARs to disclose their accounts to the IRS for the years 2004 through 2009.

57. A delegate of the Secretary of Treasury sent a notice of the assessments and demand for payment to defendants for the FBAR penalties at defendants' last known address.

58. In addition to the FBAR penalties, defendants owe late-payment penalties pursuant to 31 U.S.C. § 3717(e)(2), and interest pursuant to 31 U.S.C. § 3717(a), and applicable collection related fees pursuant to 31 U.S.C. § 3717(e)(1).

59. As of May 30, 2019, the unpaid balance owed to the United States by defendants for the FBAR penalties, the late payment penalty, applicable fees and interest, less any payments, was $119,603,703.38.

60. The United States is entitled to a judgment against defendants in the amount of $119,603,703.38 as of May 30, 2019, plus statutory accruals as provided by law from that date until fully paid.

WHEREFORE, the United States requests that the Court:

A. Enter judgment in favor of the United States of America and against Francis Burga and Francis Burga as the Administrator of the Estate of Margelus Burga, in the amount of $119,603,703.38 as of May 30, 2019, plus statutory accruals from that date until fully paid; and

B. Award the United States of America its costs, and such other further relief as the Court deems just and proper.

Dated this 10th day of June, 2019

RICHARD E. ZUCKERMAN
Principal Deputy Assistant Attorney General

AMY MATCHISON
Trial Attorney, Tax Division
United States Department of Justice
P.O. Box 683, Ben Franklin Station
Washington, D.C. 20044
Telephone: (202) 305-4929
Email: Amy.T.Matchison@usdoj.gov