CAPITALISM'S ACHILLES HEEL Dirty Money and How to

Notes 409
51. In 1988 in the Anti-Drug Abuse Act, Congress added §1346 to Title 18
in order to broaden the interpretation of a scheme: “For the purposes of
this chapter, the term ‘scheme or artifice to defraud’ includes a scheme
or artifice to deprive another of the intangible right of honest services.”
52. U.S. Customs Service, Customs Value, Washington, D.C., December
1999, 2–3.
53. United States v Haim, 218 F. Supp. 922 (S.S.N.Y., 1963) [9][10] states
the following: “The purpose of the general false statement statute, 18
U.S.C. §1001, has been broadly defined to include all ‘false and fraudulent
statements or representations where these were knowingly and willingly
used in documents or affidavits’ in any matter within the
jurisdiction of any department or agency of the United States.”
54. A further statute bears mentioning—26 U.S.C. §7201, commonly referred
to as the tax evasion statute. Abusive transfer pricing that reduces
taxes payable in the United States could conceivably be prosecuted under
§7201 if it was fraudulent and constituted criminal tax evasion as
opposed to permissible tax avoidance, but the burden of proof would be
difficult and the Internal Revenue Service has not demonstrated much
interest in moving in this direction.
55. Robert J. Leo, “Impact of the Asian Crisis on Transnational Legal Practice:
A Primer on Pricing Issues for Counsel to Importers and Exporters,”
International Law Practicum (Autumn 1999).
56. United States v Boots, 80 F.3d 580 (1st Cir. 1996).
57. United States v Trapilo, 130 F.3d 547 (2nd Cir. 1997).
58. United States v Pasquantino, 336 F.3d 321 (4th Cir. 2003).
59. Bradley R. Wilson, “Subtle Indiscretions? International Smuggling,
Federal Criminal Law, and the Revenue Rule,” Cornell Law Review 89,
no. 1 (November 2003): 253, 260.
60. Interview by the author with a Treasury Department official, Washington,
D.C., not for attribution.
61. Another approach to curtailing transfer pricing, taken by the OECD,
the United States, and many other major countries, falls under the
rubric of “advance pricing agreements” (APA). In order to escape arbitrary
assessments of taxes, which can be done legally by taxing authorities
in many countries, corporations are encouraged to bring
their transfer pricing methodologies to tax authorities for review.
Upon approval under APA programs, tax authorities forego the threat