Wolfgang Roessel, a former client of UBS AG (UBSN) and Wegelin & Co., avoided prison for failing to report more than $11 million in Swiss accounts to U.S. tax authorities.
Roessel, 71, was sentenced today in federal court in Miami to eight months of home confinement and three years of supervised release. He was also fined $10,000. He pleaded guilty on May 30, admitting he filed a false tax return for 2007 and didn’t file Reports of Foreign Bank and Financial Accounts, or FBARs, from 2002 to 2007. He has paid $6.5 million in a civil FBAR penalty and back taxes.
Roessel cooperated with prosecutors in a crackdown on offshore tax evasion. The U.S. charged at least 50 taxpayers with tax crimes since 2009, when UBS avoided prosecution by paying $780 million, admitting it helped thousands of Americans evade taxes and turning over the names of 250 American clients to U.S. authorities. UBS, based in Zurich, later revealed another 4,450 accounts.
“Mr. Roessel does not claim to be an innocent victim,” his attorney, Lee Stapleton, wrote in an Oct. 9 court filing urging leniency. “While he relied on the advice of Swiss professional bankers, he chose to keep the accounts secret and for many years did not advise his accountant that he had a foreign bank account.”
In a telephone interview today, Stapleton said her client “is glad to put this behind him.”
Roessel, a naturalized U.S. citizen, came from Germany, where he stopped school at age 16 and worked as a welder in the same factory as a grandfather, who helped raise him, Stapleton wrote in the filing. In the U.S., he ran a successful business that rented and serviced motion picture equipment, and he holds patents on motion picture lenses, according to his attorney.
Roessel’s mother had little money until she spent many years with a man who died in 1997 and left his “considerable estate” to her, Stapleton wrote. She died two years later and left her estate to her son in a numbered account at UBS.
“The funds sat and continued to grow,” Stapleton wrote. “The account was not part of Mr. Roessel’s life either as a place to hide U.S. income or as a foreign based piggy bank. It was an account that held a substantial inheritance.”
In 2002, Roessel’s banker at UBS, the largest Swiss bank, told him that anonymous Swiss accounts were no longer available to U.S. clients, Stapleton said. He then opened a trust that included the proceeds of his inherited money.
He opened another UBS account in 2004, in the name of Cyan United SA, that invested in U.S.-based securities, according to Stapleton. He deposited money into it from a numbered account at Wegelin for foreign proceeds that he set up in 1980s and that received proceeds from equipment sales in Germany, she wrote. Roessel’s UBS banker visited him several times a year to update him on the account, according to his lawyer.
The Cyan account has been a “cataclysmic investment” because “he is now a convicted felon who has paid much of his inheritance and life savings to the U.S. government in the form of penalties and back taxes,” Stapleton wrote.
Wegelin was indicted Feb. 2, charged with helping U.S. taxpayers hide more than $1.2 billion from the Internal Revenue Service. It was first Swiss lender charged in the U.S. crackdown.
The case is U.S. v. Roessel, 12-cr-60074, U.S. District Court, Southern District of Florida (Fort Lauderdale).
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