Abrham Barouh founded the luxury brand Michele Watches, which he sold to Fossil Inc. for $50 million in 2004. The tax evader was sentenced Friday to 10 months in federal prison after claiming his Jewish parents' experience fleeing the Nazi Holocaust drove him to compulsively hide more than $10 million in secret accounts at Swiss bank UBS AG and other offshore tax havens.
Court documents show his effort to evade U.S. taxes started much earlier, in 1976, when he began skimming money from his company and stashing it in accounts in Hong Kong, the British Virgin Islands, Switzerland and Panama.
The Holocaust Has Scarred Him
Barouh has sought psychiatric help for the Holocaust compulsion, the desire to "hide and hoard" assets to guard against a potential repeat of the Nazi attempt to exterminate Jews during World War II. Barouh's family wereb diamond dealer in Bogota, Colombia.
"I have lived under the weight of the Holocaust," Barouh told the judge.
A Judge Gives Him A Break
Instead of 2½ years in prison, a teary-eyed judge gave him 10 months. He has to pay $5 million in penalties for not reporting his overseas accounts and still owes back taxes, interest and penalties to the IRS.