Why an Alaska plastic surgeon
took a sudden road trip to Panama with millions of dollars
When Michael Brandner, a plastic surgeon in Anchorage, packed his
bags and drove more than 4,000 miles from Washington state to Costa Rica in
2007, he wasn’t just getting away from it all. Not long before, Brandner’s wife
of 28 years had filed for a divorce. According to a later indictment and court
documents, the doctor "collected" $3 million of his and his wife’s
assets, converted them into cashier’s checks and set off on a secret trip.
In Costa Rica, Brandner opened a bank account to deposit some of
the money and put a thousand ounces of gold in a safety deposit box. Then he
traveled to Panama, where he opened an account in the name of a sham
organization, Dakota Investment, according to prosecutors' documents from the
case. In 2008, he deposited $4.6 million into the account. Brandner also did
not report the accounts to the Internal Revenue Service. During the divorce
proceedings, Brandner claimed the money was tied up in these investments and
could not be returned, and that the investments were then lost.
Brandner went to all this trouble, the Justice Department says, to
conceal assets from his wife, who could have been awarded some of them.
Ultimately, U.S. investigators seized the assets. The doctor pleaded not guilty
to the charges, but on April 4 of this year, he was sentenced to 48 months in
prison for wire fraud and tax evasion.
Brandner's case draws attention to a less widely recognized use of
offshore accounts -- hiding assets from a spouse in divorce -- that was
highlighted by the leak this month of the Panama Papers, which contain many
details about the secretive offshore companies and accounts of public
officials, drug kingpins and money launderers. The Washington Post has not
reviewed the 11.5 million documents.
Brandner declined to be interviewed directly, but his lawyer,
Randall Ensminger, offered several defenses. He says that Brandner did not
evade taxes on purpose — he just didn’t know that he needed to file for the
offshore accounts — and that he took the money to Panama not to defraud his
wife but to protect their assets during a time of emotional upheaval in their
relationship. Brandner's intent in taking the money to Panama was "to
protect it on behalf of his heirs," says Ensminger.
Experts in the industry say that Americans are still hiding money offshore from
litigious spouses and tax officials alike, but it is getting
harder for them to do so. In the last few years, the Obama administration and
the Treasury department have erected staggering penalties for those who hide
their wealth offshore, as well as many new reporting requirements, says Daniel
Jones, a forensic accountant who specializes in the issue.
