(Updates with allegations in seventh paragraph.)
July 21 (Bloomberg) -- Federal prosecutors in New York accused a Swiss financial adviser of conspiring with more than 60 U.S. taxpayers to hide more than $184 million in offshore accounts.
The indictment unsealed today in Manhattan federal court charges Beda Singenberger, 57, of Zurich with a single count of conspiracy, which carries a maximum prison term of five years. U.S. Attorney Preet Bharara said Singenberger took part in an 11-year scheme to help U.S. clients hide assets from the U.S. Internal Revenue Service in Swiss bank accounts.
According to the indictment, Singenberger set up phony Liechtenstein foundations and fake Hong Kong, Panama and British Virgin Islands corporations to conceal the ownership of accounts established at various Swiss banks.
When it became public in 2008 that UBS AG, one of the banks where Singenberger’s client accounts were held, was under investigation by the U.S., he helped move the accounts to other Swiss banks that didn’t have U.S. operations, prosecutors said.
In 2009, the U.S. criminally charged UBS with aiding tax evasion by U.S. clients. Zurich-based UBS avoided prosecution by paying $780 million, admitting it fostered tax evasion and giving the IRS data on more than 250 accounts to avoid criminal prosecution. The bank later turned over data on another 4,450 accounts. The U.S. dropped its criminal case against UBS in October.
Not in Custody
Bharara’s office said Singenberger isn’t in U.S. custody. A call placed to his Zurich-based Sinco Treuhand AG after business hours wasn’t answered.
According to the indictment, between 2007 and 2010 Singenberger gave one of his U.S. clients a document providing information about many of his clients and prospective clients, including names, places of residence and the names of the entities set up to shield the accounts from U.S. scrutiny.
The indictment describes how Singenberger allegedly advised clients to set up sham entities whose names included Lucky Overseas Ventures Ltd. and Real Cool Investments Ltd., to hide the fact that the account owners were U.S. citizens. It includes detailed allegations of Singenberger’s work for five unnamed U.S. clients.
In addition to UBS, Singenberger’s client accounts were held at several unnamed banks based in Switzerland and Liechtenstein.
The entities named in the indictment correspond to those cited in criminal charges against at least three U.S. residents charged last year in New York and Boston with hiding income in Swiss accounts. All three, Gregory Rudolph, Ernest Vogliano and Sybil Nancy Upham, pleaded guilty, according to court records. Vogliano was sentenced to two years’ probation and fined $10,000. Rudolph and Upham are awaiting sentencing.
Prosecutors said U.S. law requires residents to declare income and to report to the IRS any overseas bank accounts of more than $10,000.
According to the indictment, after news accounts reported in May 2008 that Bradley Birkenfeld, a UBS banker, was going to plead guilty to tax charges and cooperate with the U.S. investigation, Singenberger met with one of his clients, identified in the indictment as “Client 2.”
Client 2 had inherited an undeclared UBS account. Singenberger helped Client 2 set up a sham Hong Kong corporation, Sinohigh Investments Ltd., and moved the account from UBS to a different Swiss bank, according to the indictment.
Prosecutors said Singenberger’s firm was paid $10,000 for the transaction. Client 2 allegedly didn’t report to the IRS the income from the account, which held $2.3 million, or report its existence, as required.
Singenberger told Client 2 that “only banks with operations in the United States were in a position to be affected by the investigation of UBS,” according to the indictment.
The case is U.S. v. Singenberger, 11CR620, U.S. District Court, Southern District of New York (Manhattan).
--Editors: Andrew Dunn, Fred Strasser
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