He made $7.7 million over 8 years, but neither he nor his business paid taxes
A Palm Beach County businessman made enough money from 1999 to 2014 to pay cash for a $1.6 million home on the Intracoastal Waterway, buy a yacht and pay for a New York City relative’s condominium fees.
What Dusko Bruer didn’t pay were personal income taxes or corporate income taxes.
For those 16 calendar years of tax-free living, Bruer is facing up to 10 years in federal prison, a maximum five years for the one count of tax evasion and one count of willful failure to file a report of a foreign bank or financial account to which he pleaded guilty in federal court.
Sentencing for the 67-year-old Lake Worth Beach man is scheduled for June 12.
TriCorp
According to the Justice Department, in 1988, Bruer and a partner started a company that sold American-made agricultural machinery and parts internationally. Online databases, state of Florida records and a company website identify that company as TriCorp USA.
Bruer’s admission of facts says TriCorp, which Bruer took sole ownership of in 2003, stopped paying corporate income tax in 2000. Bruer stopped paying personal income tax the previous year, according to the documents.
TriCorp also never filed employer payment paperwork with the Internal Revenue Service, according to the case. So, not only did the business not pay corporate income tax, it never paid its Social Security tax, Medicare tax, federal unemployment tax — nor did it withhold employees’ federal income tax, Social Security tax or Medicare tax.
TriCorp grossed in the millions each year, enough that Bruer didn’t take a salary, but rather just used the corporate funds as his personal money.
He gave $465,000 to two relatives. He used $255,000 to buy out a partner’s interest in Serbian real estate they owned together. He bought a 54-foot yacht called Hawk’s Nest for $235,000, and paid $135,000 over the next four years for the docking, servicing and registering of the yacht.
In 2009, Bruer “gave” TriCorp to his personal assistant, but put it in the name of a relative of the assistant because the assistant was going through a nasty divorce, court rercords say. For the next two years, the relative filed income and expenses from TriCorp on his own returns on a Schedule C supplement and subtracted Bruer’s personal usage, such as the purchases and gifts, as business expense deductions.
The personal assistant did the same with Bruer’s personal use of TriCorp money on returns from 2012 through 2017.
Nothing personal
Meanwhile, Bruer admitted when he didn’t file personal income taxes in 2007 through 2014, he made a total of $7.7 million.
As part of $800,000 Bruer received from a relative’s estate, a life insurance company sent Bruer $41,498 in 2012, according to court documents. The insurance company also sent $2,161 as tax to the IRS.
In 2014, the IRS told Bruer he hadn’t filed a tax return for 2012. So Bruer filed a 2012 tax return, but using the 1040EZ form, what a 16-year-old would use after seven months of part-time work at Arby’s. Bruer claimed no income and a home residence in Dubrovnik, Croatia.
The IRS sent him the $2,161 upon his request. Bruer later used the same form in filing for 2013 and 2014. In 2016 and 2017, he retroactively filed personal tax returns for 2007 through 2011 that ignored all income from TriCorp as well as his foreign bank accounts, his admission of facts says.
Foreign funds
Bruer got the money for the $1.65 million Lake Worth Beach home from bank accounts he had in Croatia, Germany, Serbia and with Credit Suisse. These required he file a Report of Foreign Bank or Financial Account (FBAR). The year-end totals in these accounts peaked at over $6 million in 2009 and 2010 and averaged $3.58 million from 2007 through 2015.
In 2015, Credit Suisse sent a letter to Bruer saying it was closing his account and he should go into the IRS’ Offshore Voluntary Disclosure Program, which would give him the chance to avoid criminal prosecution by filing back tax returns, late FBARs and paying taxes and penalties. Bruer pondered this long enough to have a forensic accountant figure out how much it would cost him.
Bruer decided it would cost too much to fall on the tax knife. Instead, he submitted the returns for 2007 through 2015, his court documents say.
