Tax Court Clarifies Deductibility of Long-Term Care Expenses

Long-term health care can be expensive, but fortunately many of those expenses are tax deductible.  Two recent Tax Court decisions shed light on when such caregiver services are deductible.  In Estate of Lillian Baral, 137 T.C. 1 (2011), the Court held that payments to non-medical caregivers are deductible as long as the patient is “chronically ill” and the doctor deems that caregivers are necessary due to the patients illness.  Second, in Estate of Olivo v. Commr, T.C.M. 2011-163, the court ruled that caregiver services given to a family are presumed to be gratuitous without a written agreement to the contrary. 

Ordinarily, under IRC § 213, certain unreimbursed medical expenses are deductible to the extent they exceed 7.5 percent of adjusted gross income. In 2012, the threshold will rise to 10 percent of adjusted gross income. Medical expenses can include amounts paid for diagnosis, cure, mitigation, treatment, or prevention of disease, and amounts paid for qualified long-term care services.  Id.

Estate of Lillian Baral

In Estate of Lillian Baral, an elderly Lillian Baral was diagnosed with dementia.  Baral, 137 T.C. at 4. Because Ms. Barals physician determined that she required 24-hour care, her brother hired unlicensed caregivers to provide the prescribed assistance.  Id. at 5.  The IRS later argued that the $49,580 expense did not qualify as a deductible long-term health care expense.  Id. at 7. 

Following her death, Ms. Barals estate appealed the matter to the Tax Court.  The Tax Court held that the services provided by the caregivers were “necessary” services, “provided pursuant to a plan of care prescribed by a licensed practitioner,” and therefore were qualified long-term care services under IRC § 7702B(c) and qualified medical expenses under IRC § 213(d)(1)(C). Id. at 12.

Estate of Olivo v. Commissioner

In Estate of Olivo v. Commr, Anthony Olivo nearly abandoned his struggling legal practice to provide full-time care for his mother, the decedent. Olivo at 3. Mr. Olivo kept meticulous records of the extensive care he provided, which lasted approximately from 1993 to 2004. Id. at 5. According to Mr. Olivo, the decedent offered to pay him for his services; they orally agreed on a rate of $400 per day, to be paid after her death.  The agreement was never reduced to writing.  Id. at 10.

Subsequently, on the estates tax return, Mr. Olivo claimed for the estate a $44,200 statutory administrators commission, $50,000 estimated attorneys fees, and a $1,240,000 debt owed to him as compensation for his caregiver services. Id. at 7. Mr. Olivo subsequently became the administrator of the estate.  When the IRS disallowed the deduction, he filed a petition with the Tax Court.

The Tax Court agreed with the IRS.  Because Mr. Olivo could not provide any evidence other than his own self-serving oral testimony as proof of the agreement with the decedent, the Tax Court rejected Mr. Olivos $1.240 million compensation claim.  The Court held that, without corroborating evidence of the alleged agreement, the estate was not entitled to deduct the Mr. Olivos claim for compensation pursuant to the agreement. Id. at 12.

Alternatively, Mr. Olivo argued that he was entitled to compensation under quasi-contract.  Applying New Jersey law, the Court presumed that “services rendered to a family member living in the same household are rendered gratuitously.” Id. at 14. Here, too, the Court found that Mr. Olivo failed to satisfy his burden of proving the oral agreement by “clear and convincing evidence” or even by the less exacting “preponderance of the evidence” standard.  Id. at 15.

Thus, even though Mr. Olivo took extraordinary care of his mother during her final years, the estate was not entitled to deduct the medical compensation expense, and Mr. Olivo was not entitled to claim compensation for his services.  However, if he had taken time to properly memorialize the alleged agreement, the Court might have ruled differently.

These two Tax Court cases are noteworthy because they clarify which medical expenses are deductible and how you can plan such expenses more advantageously for yourself or for a family member.   Moreover, Olivo reiterates the need to be prudent about keeping written records of all agreements, especially where estate matters are concerned.

The attorneys at Fuerst Ittleman have a wealth of experience in all areas of tax planning and asset protection.  To find out more, contact an attorney at contact@fidjlaw.com. 

FDA Issues Draft Guidance for Mobile Medical Apps

On July 21, 2011, the U.S. Food and Drug Administration (FDA) issued its draft guidance describing the agencys plan to apply its regulatory oversight to certain types of mobile medical applications (“apps”) that run on mobile platforms. The agency is focusing on medical apps that directly diagnose or treat conditions such as diabetes or transform mobile platforms, such as smartphones and iPads, into medical devices.

Regulated medical apps are defined as software applications that meet the definition of a medical device pursuant to section 201(h) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) and are either 1) used as an accessory to a regulated medical device, or 2) transform a mobile platform into a regulated medical device. For example, an app that would allow a health care professional to make a specific diagnosis by viewing a medical image from a picture on a smartphone would be considered an accessory. However, an app that turns a smartphone into an electrocardiogram machine would transform a mobile platform into a regulated medical device.

Medical apps, like other medical devices, will be classified as Class I, Class II, or Class III, and will be subject to the same requirements as the medical device classification. Some of these requirements include registering and listing the medical app with the FDA, premarket approval or clearance, labeling, quality system regulation, and medical device reporting. More information on FDA medical device regulation can be found here. 

The FDA is currently seeking public comment on how it should approach mobile medical apps that are accessories to other medical devices so safety and effectiveness can be reasonably assured. The deadline for submission is October 19, 2011.

Fuerst Ittleman will continue to monitor the progress of the FDAs regulation of mobile medical apps. For more information, please contact us at contact@fidjlaw.com.

USDA Considers Deregulation of Genetically Engineered Crops

Since 2006, the U.S. Department of Agricultures (USDA) Animal & Plant Health Inspection Service (APHIS) has issued over 70 decisions that deregulate genetically engineered (GE) crops, some of which include corn, soybeans, cotton, canola, alfalfa and squash. On July 1, 2011, APHIS issued another decision deregulating GE Kentucky bluegrass.

APHIS, the U.S. Food and Drug Administration (FDA), and the U.S. Environmental Protection Agency (EPA) share responsibility for regulating biotechnology products, including GE crops, to ensure that approved biotechnology products developed in the U.S. pose no risk to human health or the environment.

APHIS has stated that it does not have the authority to regulate the introduction or transportation of GE crops under the Plant Protection Act (PPA) if the crop does not present a potential for new “plant pests.” GE crops that are derived from genes or tools of microbes are subject to regulations pursuant to the PAA because they are created from plant sequences that could be potential plant pests and pose a threat to crops within the U.S. The deregulated GE crops are developed using genetic material from other plants, such as corn and rice, and contain no microbes, and therefore do not pose a threat as a potential plant pest. The USDA has stated that the decision does not represent a shift in policy and that it will make decisions on a case-by-case basis.

Critics are concerned that the deregulation of GE crops may affect the campaign for mandatory labeling of GE products. The FDA issued draft guidance in 2001 for voluntary GE labeling, but has not updated the document since. Critics of GE crops argue that consumers have a right to know what is in their food, including animal genes. Proponents of GE crops state that labels on GE food imply a warning about health effects, whereas no significant differences between GE and conventional foods have been detected. If a nutritional or allergenic difference were found in a GE food, current FDA regulations require a label to that effect. Currently, no GE foods on the market or under review contain animal genes.

For more information on current USDA, EPA, and FDA authority, procedure, or regulations regarding genetically engineered products please contact us at contact@fidjlaw.com.

FDA Urged to Ban Cephalosporin Use in Food Animals

In July 2008, the FDA announced it would implement a rule to prohibit the extra-label use of cephalosporins but then revoked the order to consider all comments received on the prohibition. On July 21, 2011, U.S. House Representative Louise Slaughter (D-NY) urged U.S. Food and Drug Administration (FDA) Commissioner Margaret Hamburg to finalize a stalled rule to ban extra-label use of the cephalosporin class of antibiotics in food-producing animals.

Cephalosporins are primarily used on poultry, cattle and pork farms, where the FDA has approved their use for numerous veterinary purposes. However, farmers have also adopted “extra-label” or preventative uses of cephalosporin. In one such use, shells of chicken eggs are pierced just before hatching and injected with doses of third-generation cephalosporin antibiotics, ceftiofur, in order to suppress infection outbreaks. Cephalosporins are also used to treat baterical infections in humans.

Advocates for the ban insist that the extra-label use of cephalosporins in food-producing animals is likely to lead to the emergence of cephalosporin-resistant strains of foodborne bacterial pathogens. If these drug-resistant bacterial strains infect humans, it is likely that cephalosporins will no longer be an effective treatment. Currently, human drug-resistant bacteria strains include E. coli, salmonella, and gonorrhea.

Groups, such as the American Veterinary Medical Association (AVMA), protested the 2008 prohibition of extra-label use of cephalosporin. The AVMA insists that studies cited by the FDA fail to directly demonstrate that veterinary use of cephalosporins impairs human medicine. Additionally, the FDA prohibition would put animals at risk because extra-label cephalosporin use is medically necessary to relieve animal pain and suffering. Just weeks after the AVMA filed its protest, the FDA reversed the prohibition.

Congresswoman Slaughter also authored legislation to amend the Federal Food, Drug, and Cosmetic Act (FD&C Act) to preserve the effectiveness of medically important antibiotics used in the treatment of human and animal diseases. The House Bill, known as the Preservation of Antibiotics for Medical Treatment Act of 2011, would require the Secretary of Health and Human Services (HHS) to deny applications and withdraw approval of nontherapeutic uses of antibiotics in food-producing animals that are also used in humans to treat or prevent disease. Currently, there is a similar Senate version of the House Bill in committee.

Fuerst Ittleman will continue to monitor the progress of the FDAs regulation of antibiotics in food animals. For more information, please contact us at contact@fidjlaw.com.

FDA Issues Guidance Clarifying When Changes or Modifications to an Existing 510(k) Require New PMA Submission

On July 26, 2011, the U.S. Food and Drug Administration (FDA) issued draft guidance that clarifies when changes or modifications to a previously cleared 510(k) device necessitate a new premarket submission. In order to introduce a medical device into the interstate market, the FDA must either approve a premarket application (PMA) or clear a 510(k) premarket notification. Lower-risk devices are often submitted through the 510(k) premarket notification process, whereby the FDA “clears” the device for sale if it is found to be substantially equivalent to a previously cleared predicate device. The FDA announced that an additional 510(k) notification is required in instances where a change or modification to a cleared device would “significantly affect the products safety or effectiveness” or “constitute a major change to the intended use of the device.”

The new draft guidance outlines when an additional 510(k) notification is required for compliance with FDA regulations. The guidance suggests that manufacturers should compare the modified device to the most recently cleared version of the device to determine whether the modification could significantly affect its safety or effectiveness. In addition, manufacturers should assess individual changes to a device to determine whether, if at all, any of those changes constitutes a major change to the products safety, effectiveness, or intended use. A manufacturer should clearly document whether it believes the change does or does not require submission of an additional 510(k) notification, as well as the reason for that decision.

Furthermore, the FDA provides specific guidance to help manufacturers determine whether to submit an additional 510(k) notification for changes or modifications to the manufacturing process, product labeling, technology or engineering, or material type. This guidance also instructs manufacturers to weigh whether bench testing or simulations are sufficient to assess the safety or effectiveness of a modified device. Absent clear evidence of safety or effectiveness from these types of testing, the FDA suggests that manufacturers conduct clinical data using human subjects to validate the safety of these products.

This guidance document is part of the FDAs Plan of Action for Implementation of 510(k) and Science Recommendations, a series of action items launched earlier this year intended to “enhance predictability, consistency, and transparency of the FDAs premarket review programs.” For more information about the FDAs Plan of Action, see our previous post here.

Fuerst Ittleman is well-equipped to assist members of FDA-regulated industry navigate the laws and regulations applicable to medical devices. For more information about the current regulatory framework surrounding medical devices, please contact us at contact@fidjlaw.com.

Whistleblowers Claim Dialysis Company Deliberately Wasted Hundreds of Millions of Dollars in Medicine to Collect Medicare Overpayment

Earlier this week, a pair of whistleblowers filed an amended complaint in United States District Court in Atlanta alleging that DaVita, a kidney dialysis clinic, intentionally wasted medicine to collect Medicare drug overpayments. The plaintiffs claim that DaVita changed how it dispensed dialysis medication in order to inflate their Medicare reimbursement return. The original complaint, which was filed in October of 2007, was unsealed this past week. After two years of investigating the claim, the federal government decided in April that it did not intend to join the lawsuit.

DaVita, the second largest independent provider of dialysis services for patients with chronic kidney failure, is responsible for treating nearly one-third of the nations dialysis patients. The complaint against DaVita alleges that the company designed multiple sets of conflicting internal protocols and “dosing grids” that dictated how each drug should be administered to patients, based on the cost of the drug and Medicare reimbursement. Prior to January 2011, Medicare paid dialysis centers separately for dialysis procedures and medication. Dialysis centers often made a profit from these Medicare reimbursements because Medicare reimbursed more than the centers paid for the medicine. Earlier this year, however, Medicare changed its payment plan in an attempt to curb overuse of dialysis drugs. In January, Medicare transitioned to a bundled-payment system, where payments are fixed per treatment and include the cost of drugs. Under this system, Medicare reimburses dialysis centers for the total amount of medicine contained in the vial, not the amount of medicine administered to the patient

In response to this new reimbursement system, DaVita adjusted the way it ordered and administered medication. Under the old system, for example, DaVitas dialysis treatment consisted of a six-microgram dose, which was administered in three vials of two-micrograms each. After Medicare shifted to the bundled-payment system, DaVita used the same six-microgram therapy program but administered the therapy from a single 10-microgram vial instead. According to the whistleblowers, the excess four-micrograms were not used in therapy and were simply wasted. The dialysis treatment remained the same, except DaVita charged Medicare for four extra micrograms of medication it did not actually administer to patients. A similar sequence of events was reported for DaVitas administration of Venofer, where approximately 75 milligrams of medication was wasted each therapy session. These examples are contrasted with DaVitas use of Epogen, an anemia drug that is paid for based on the amount actually used, not the amount per vial. The lawsuit alleges that DaVita did not waste any Epogen medication. The allegations against DaVita have been supported by other physicians and nurses working in dialysis clinics around the nation.

DaVita denies that it overused pharmaceuticals in return for financial incentives. A representative of DaVita claims that the changes in its administration of dialysis therapy have been dictated by physicians, not DaVitas own drug protocol.

Fuerst Ittleman will continue to monitor the progress of this whistleblower lawsuit For additional information, please contact us at contact@fidjlaw.com.

Beda Singenberger Charged with Swiss Account Conspiracy

Swiss financial advisor Beda Singenberger, 57, was charged with helping more than 60 U.S. taxpayers hide over $184 million in Swiss bank accounts and then avoid U.S. authorities by moving assets from UBS AG to other Swiss banks. The indictment came on the same day that U.S. authorities separately charged several Credit Suisse bankers with helping Americans evade taxes and nearly 2 ½ years after UBS paid a $780 million penalty settlement with the U.S. to avoid prosecution.

According to the indictment filed last Thursday in Manhattan federal court, Singenberger, a Certified Public Accountant, conspired to hide clients income from the IRS from 1998 to 2009. To further his conspiracy, in 2001 he allegedly began creating sham corporations, “foundations, and “establishments,” under the laws of Hong Kong, Liechtenstein, and other foreign jurisdictions to conceal accounts. Several of these entities were named in earlier federal cases against UBS clients.

Then, upon learning in 2008 that U.S. authorities were investigating UBS, Singenberger allegedly helped his U.S. clients move their funds to other Swiss banks without a physical U.S. presence. According to the indictment, he also provided various Swiss banks with fictitious IRS forms which stated that undeclared accounts at those banks were not U.S. clients.

Beda Singenberger operated the wealth management and tax advisory business called “Sinco Treuhand AG” (“Sinco”), which surfaced in connection with an August 2004 internal UBS memo that was released by the U.S. Senate Permanent Subcommittee on Investigations in 2009. The memo sent to Sinco stated, “We invite you to make a short presentation on the structures/vehicles that you recommend to U.S. and Canadian client who do not appear to declare income/capital gains to their respective tax authorities.”

If convicted, Beda Singenberger may face prison time and monetary penalties.

The upswing in indictments signals that U.S. enforcement against hidden offshore accounts is in full force, and that any taxpayers with undisclosed accounts should strongly consider taking part in the Offshore Voluntary Disclosure Initiative before the August 31, 2011 deadline.

The attorneys at Fuerst Ittleman have the expertise to guide you through any voluntary disclosure or Bank Secrecy Act compliance matter. Contact an attorney today at contact@fidjlaw.com.

U.S. Indicts Three Credit Suisse Bankers

Last Thursday, Federal prosecutors filed charges against Markus Walder, Susanne D. Rüegg Meier, Andrea Bachmann, and Josef Dörig for conspiring with other Swiss bankers to defraud the United States. The superseding indictment implicates the three Credit Suisse bankers and Swiss trust founder along with four other defendants who were charged February 23, 2011. Although the indictment refers to an “International Bank” and not Credit Suisse, details of the information point directly to the Swiss banking giant. The new charges mount pressure on offshore bankers and taxpayers alike as the U.S. toughens its stance on foreign banks that help Americans evade their taxes.

Credit Suisses managers and bankers are charged with engaging in illegal cross-border banking activities that were designed to help U.S. customers evade their income taxes by opening and maintaining secret bank accounts. Furthermore, the defendants allegedly utilized a representative office in New York City to provide unlicensed and unregistered banking services to U.S. customers with undeclared accounts. The defendants and others allegedly made false statements and provided misleading information to the Federal Reserve Bank of New York and to the IRS to conceal Credit Suisses cross-border banking business.

Specifically, the superseding indictment alleges the following:

  • Markus Walder, former head of North America Offshore banking and former senior Credit Suisse official, supervised the cross-border banking business;
  • Susanne D. Rüegg Meier, former Credit Suisse manager, provided unlicensed and unregistered banking services to U.S. customers with undeclared accounts at the bank;
  • Andrea Bachmann, former banker at a subsidiary of Credit Suisse, traveled to the United States to assist taxpayers in evading their U.S. taxes through the use of secret bank accounts; and
  • Josef Dörig, founder of the Swiss trust Dorig AG, was a preferred provider of Credit Suisse who assisted U.S. customers in forming and maintaining nominee tax haven entities and opening secret accounts at the bank and its subsidiaries in the names of the entities.

According to a Department of Justice press release ,

The defendants and their co-conspirators [allegedly] caused U.S. customers to travel outside the United States to conduct banking related to their secret accounts; opened secret accounts in the names of nominee tax haven entities for U.S. customers; accepted IRS forms that falsely stated under penalties of perjury that the owners of the secret accounts were not subject to U.S. taxation; advised and caused United States customers to structure withdrawals from their secret accounts in amounts less than $10,000 in an attempt to conceal the secret accounts and the transactions from American authorities; mailed bank checks in amounts less than $10,000 to customers in the United States; and advised U.S. customers to utilize offshore charge, credit and debit cards linked to their secret accounts and provided the customers with such cards, including cards issued by American Express, Visa and Maestro.

The superseding indictment charges that as of 2008, the Swiss bank held thousands of secret accounts for U.S. customers. Of the 35 clients cited, one “secretly transported approximately $250,000 cash from the United States to Switzerland by concealing the money underneath [her] clothes in pantyhose wrapped around [her] body.”

Last Thursdays indictments bring the total number of indicted Credit Suisse bankers to seven. The charges signal that U.S. investigations of hidden offshore accounts remain in full force, and that any taxpayers with undisclosed accounts should strongly consider taking part in the Offshore Voluntary Disclosure Initiative before the August 31, 2011 deadline.

The attorneys at Fuerst Ittleman have the experience to guide you through any voluntary disclosure or Bank Secrecy Act compliance matter. Contact an attorney today at contact@fidjlaw.com.

Mistrial Declared in Foreign Corrupt Practices Act Case After Jury Could Not Reach Verdict

On Thursday, July 7, 2011, U.S. District Judge Richard Leon of the District of Columbia declared a mistrial in a criminal foreign bribery case under the Foreign Corrupt Practices Act (“FCPA”) involvingallegations of a corrupt deal to sell $15 million in supplies to Gabon’s Ministry of National Defense.  Prosecutors from the Department of Justice alleged that defendants John Wier III, Pankesh Patel, Lee Allen Tolleson and Andrew Bigelow tried to bribe Gabonese officials to win contracts. 

The government built its case through an undercover operation where undercover FBI agents met with the defendants and purportedly agreed to participate in the illegal deal. The case is significant because the four individuals are the first to go to trialoutof 22 military and law enforcement equipment industry executives arrested in July 2010 as part of an FBI sting. This case marked the first large-scale use of undercover techniques, commonly seen in drug or fraud cases, in an FCPA bribery investigation and it is the largest prosecution of individuals since the government began enforcing the FCPA over 30 years ago. 

The purpose of the Foreign Corrupt Practices Act is to make it unlawful for certain classes of U.S. persons and entities to make payments to foreign government officials to assist in obtaining or retaining business. Specifically, the anti-bribery provisions of the FCPA prohibit any willful or corrupt offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that such money or thing of value will be offered to a foreign official to influence the foreign official in his or her official capacity to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business.

Throughout the trial, the defense focused on and impeached the credibility of the prosecution’s top informant, to show the jury that he was unreliable and unsavory.  Richard Bistrong, the informant who helped carry out the FBI’s sting operation, had his own history of past bribery crimes, among other assorted wrongdoing. 

The jury began deliberations on June 28, and on July 7, indicated that it was “hopelessly deadlocked.”  As a result, the judge declared a mistrial, meaning no verdict; however, the prosecution intends to retry the case against all four defendants in front of a different jury. This case is an example of the energized enforcement of the FCPA, in support of which the government is willing to employ undercover operatives to engage in sting operations to sniff out violations of the FCPA. So far, although it engaged in these new investigative tactics, and despite having taken the case to trial, the government was not able to obtain convictions.

World-Check Comments On Money Laundering Risk Presented By Venezuela

As Venezuela continues to destabilize, anti-money laundering and Bank Secrecy Act compliance officers must take notice of the increased risks associated with doing business with corporations and banks located in the there. A destabilized Venezuela could result in a litany of AML and regulatory compliance issues ranging from money laundering to Iranian and Cuban Sanctions programs violations. On July 16, 2011, World-Check, one of the largest and most well respected business risk intelligence services in the AML community, issued a newsletter highlighting some of the greatest areas of concern and urging those in AML compliance to exercise “enhanced due diligence” when transacting business with Venezuela. A copy of World-Check’s newsletter can be read here.

As World-Check described in its report, the Venezuelan government recently announced that it will be selling $1.5 billion worth of dollar denominated bonds to the public. According to World-Check, the bond sale poses several risks for regulatory compliance officers. The bonds provide an easy way for money launderers to turn ill-gotten and illicit criminal proceeds, often in Bolivars or other South American currencies, into financial instrument that can be redeemed for US Dollars. As a result, there is a heightened risk that US dollars that make their way from Venezuela to US financial institutions will be the proceeds of criminal activity. World-Check advises that US financial institutions which accept US dollars from Venezuela must ensure not only that their AML compliance programs are designed to face such threats, but also that their employees are properly trained to ensure that these transactions receive increased due diligence.

Another cause for concern stems from Venezuela’s close relationships with Cuba and Iran. Iran and Cuba are subject to U.S. economic sanctions which prohibit or severely restrict trade and business with both countries. For example, the Iranian Transaction Regulations not only prohibit U.S. persons from “financing, facilitating, or guaranteeing” goods, technology or services to Iran, but also prohibit U.S. persons from approving, financing, facilitating, or guaranteeing any transaction by a foreign person where the transaction performed would be prohibited under the IRT if performed by a U.S. person. See 31 C.F.R. §§ 560.206, 560.208. Additionally, the Cuban Assets Control Regulations prohibit the purchase, transport, import, or dealing in any merchandise: 1) of Cuban origin; or 2) is or has been located in or transported from or through Cuba; or 3) is made or derived in whole or in part of any article which is the growth, produce, or manufacture of Cuba. See 31 C.F.R. § 515.204. The Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury administers and enforces economic sanctions programs.

On July 20, 2011, World-Check addressed a new concern for AML compliance officers when evaluating the risks of doing business with Venezuela: the potential for Cuban nationals to obtain fake Venezuelan passports. As explained by World-Check: “If American bankers open accounts for a Cuban national, relying upon a bogus Venezuelan passport, they violate OFAC sanctions in force against Cuba. Cuba is on the US list of State Supporter of Terrorism, and American companies and individuals cannot conduct any transactions with its nationals or entities.” World-Check’s July 20, 2011 newsletter can be read here.

As a result of the breadth and complexity of these regulatory schemes, although businesses may not directly engage in trade with Iran or Cuba, businesses may unknowingly violate OFAC sanctions because of the nature of their relationships with Venezuelan businesses who do. Examples of this can be read in our previous reports here and here. If you have questions pertaining to the OFAC sanctions on trade with Cuba and Iran, the BSA, anti-money laundering compliance, or how to ensure that your business maintains regulatory compliance at both the state and federal levels please contact us at contact@fidjlaw.com.