The U.S. government has recovered almost $500,000 from a couple in Switzerland who are accused of filing scores of false income-tax returns and having the tax refunds mailed to them overseas.
In return for the money, the federal government has agreed to stop extradition proceedings against the couple and instead allow them to face charges in Switzerland arising out of the same fraud scheme.
The agreement was worked out in Switzerland between Swiss and U.S. authorities, headed by Assistant U.S. Attorney Raymond Banoun of the fraud division here. Although the couple, Arno and Marlise Arndt, may have applied for and received additional refund checks, the amount that will be recovered will be limited to the amount the government can prove was stolen in the scheme.
Many of the checks needed for evidence, for example, have been destroyed in the Internal Revenue Service's normal course of business over the seven years the alleged scheme existed.
The scheme, described by Banoun as a "raid upon the United States Treasury," continued even after the couple were indicted in Washington and New Jersey for various aspects of the fraud, according to court documents.
According to charges against them the Arndts would create fictitious persons with fake names and jobs and real social security numbers and file income-tax returns. The returns, many of them listing identical fake salaries, would invariably ask for refunds to be sent to Swiss addresses.
If the refunds were slow in coming, Ardnt would make an overseas call to the IRS and complain.
On one such occasion, according to court documents, Arndt offered an IRS agent a $200 bribe if he would hurry up the refund, and a few days later sent the agent four $50 bills in the mail.
On another occasion, the IRS even sent Arndt more than he asked for because he was eligible for a $200 tax rebate and because the refund had earned interest while it was being processed.
The Arndts were first charged in Washington in a sealed indictment in January 1978 with illegally obtaining $210,000 in income-tax refunds. Even after the indictment, the couple filed requests for about $400,000 more in tax refunds under various names, the court was told.
Arndt, a German citizen, will be tried on various forgery-related charges in Switzerland. It is unclear at this point what charges his wife Marlise, who is Swiss, will face.
The original indictment was kept secret for 14 months while U.S. authorities tried unsuccessfulyy to persuade the Swiss government to extradite the couple to stand trial in this country.
However, the Swiss government said earlier this year it would prosecute the couple under Swiss law if the United States were willing to assist in the case. Banoun took the evidence in the case to Switzerland and worked with Swiss authorities in developing the case over the last few weeks.
Although the extradition question technically still is an open one, government lawyers said that any prosecution in Switzerland on the same scheme would prohibit the couple from being tried later in the United States.
Arndt could not be reached for comment in Switzerland yesterday, and his wife, Marlise, said she could not comment.