Christos Bagios, a former banker at UBS AG (UBSN) and Credit Suisse Group AG (CSGN) who was arrested in January 2011 amid a U.S. crackdown on offshore tax evasion, is scheduled to change a not guilty plea he entered today, according to court records.
Prosecutors charged Bagios last year with helping 150 American clients hide as much as $500 million from the Internal Revenue Service when he worked at UBS, where he spent 15 years before joining Credit Suisse in 2009.
He was charged yesterday in federal court in Fort Lauderdale, Florida, in a document known as a criminal information, which typically precedes a guilty plea. Bagios was arraigned today on the conspiracy charge in Fort Lauderdale and pleaded not guilty. He is scheduled to return to court in West Palm Beach, Florida, for a change-of-plea hearing on Oct. 26.
Bagios and other Swiss bankers conspired to “assist U.S. customers in concealing assets and income from the U.S. government, including the IRS,” according to the charge filed yesterday.
Bagios declined to comment after the hearing today.
Bagios is one of about two dozen foreign bankers, lawyers or advisers charged since 2008 in the crackdown on offshore tax evasion. Seven current or former Credit Suisse bankers were indicted last year. Prosecutors also have charged about 50 U.S. taxpayers. UBS, the largest Swiss bank, avoided prosecution by paying $780 million, admitting it helped Americans cheat on taxes, and turning over data on secret accounts. At least 11 other banks are under criminal investigation.
Last month, a U.S. magistrate judge denied a bid by Bagios to modify his bail and visit his family in Switzerland and his ailing mother in Greece. Lawyers for Bagios, who is free on $650,000 bail, said he has an “impeccable record” of complying with terms of his release, and he would return.
Prosecutors argued that Bagios faces five years in prison and he might flee because he has no incentive to return to Florida.
“Permitting the defendant to travel to his country of origin or residence would be an invitation to flee,” U.S. Magistrate Judge Lurana S. Snow ruled.
Bagios was initially charged on a criminal complaint and prosecutors agreed several times to push back the deadline for indicting him. In an Aug. 1 court filing, Matthew Menchel, a lawyer for Bagios, said he and prosecutors “have had ongoing discussions about possible resolutions to this case.”
Menchel wrote that the travel restriction has been “incredibly onerous” on Bagios, who wanted to go to Switzerland to visit his wife and two children.
He also wanted to go to Greece, where he is a citizen, to visit his widowed 76-year-old mother. She has non-malignant brain tumors, Menchel said. Bagios is “increasingly at risk of being unable to make the rent payments” on his Florida apartment, Menchel wrote.
In opposing Bagios’s motion to leave Florida, prosecutors said they have “unearthed substantial evidence” of his role in a conspiracy to defraud the U.S. through secret Swiss accounts. The IRS had interviewed seven of his former UBS customers who failed to declare accounts to the agency, according to the government’s court filing on Aug. 20.
Prosecutors have said that a former UBS banker who pleaded guilty, Renzo Gadola, gave the U.S. information that led to the arrest of Bagios and charges against another former UBS banker, Martin Lack.
Lack was indicted in August 2011 on a charge of conspiring to help Americans evade taxes by hiding accounts in a smaller Swiss regional bank. Lack, a Swiss resident and independent investment adviser, is accused of conspiring with Gadola. Lack hasn’t responded in federal court in Fort Lauderdale to the charge.
The case is U.S. v. Bagios, 12-cr-60260, U.S. District Court, Southern District of Florida (Fort Lauderdale).
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