Oct. 12 (Bloomberg) -- Two Julius Baer Group Ltd. client advisers were charged yesterday with helping U.S. customers of the Zurich-based bank evade taxes, according to an indictment and a person with knowledge of the matter.
Daniela Casadei and Fabio Frazzetto conspired with more than 180 U.S. clients and others at the bank to hide at least $600 million in assets from the Internal Revenue Service, according to the indictment in federal court in New York and the person, who wasn’t authorized to speak about the matter. The indictment refers to the bank as Swiss Bank No. 1.
The Justice Department has said eight offshore banks are under grand-jury investigation for facilitating tax evasion. The U.S. crackdown has led to charges against UBS AG, the largest Swiss bank; at least 19 other bankers, advisers and attorneys; and at least 36 U.S. taxpayers. Seventeen of those charged are outside the U.S. and haven’t responded in court to the charges.
The IRS has said 30,000 U.S. taxpayers with offshore accounts avoided prosecution since 2009 by entering a limited amnesty program, paying back taxes and saying who helped them hide their accounts from authorities.
The taxpayers who were criminally charged had accounts at banks including UBS; Credit Suisse Group AG, Switzerland’s second-largest bank; and HSBC Holdings Plc, Europe’s biggest bank.
Below is a summary of the cases filed in federal courts around the U.S.:
UBS: In February 2009, U.S. prosecutors charged the Zurich-based bank with aiding tax evasion by thousands of U.S. clients. UBS avoided prosecution by paying $780 million, admitting it fostered tax evasion and giving the IRS data on more than 250 accounts. It later turned over data on 4,450 more accounts.
Credit Suisse: Seven Credit Suisse bankers were indicted July 21 on a charge of conspiring to help U.S. clients evade taxes through secret bank accounts. Managers in the cross-border business “knew and should have known they were aiding and abetting U.S. customers in evading their U.S. income taxes,” according to the indictment in federal court in Alexandria, Virginia. In the fall of 2008, the Zurich-based bank had “thousands” of accounts with $4 billion in assets not declared to the IRS, according to the indictment. On July 15, the bank said it was the target of a U.S. criminal probe over former cross-border private banking services to U.S. customers.
HSBC: The bank was the subject of an IRS summons in April seeking information about Americans who had accounts at HSBC India from 2002 to 2010. Through September 2010, about 9,000 U.S. residents had non-resident Indian accounts of $100,000 or more, and only 1,391 disclosed their accounts to the U.S. in 2009, the IRS said in court filings in California. The clients had deposits of almost $400 million in the accounts. London- based HSBC said it doesn’t condone tax evasion and is cooperating with the U.S.
--Bankers, Advisers and Lawyers:
Bradley Birkenfeld: A former UBS banker, he pleaded guilty to helping wealthy Americans, including billionaire Igor Olenicoff, evade taxes. In 2007, Birkenfeld approached the Justice Department and revealed what a prosecutor later described as a “massive tax scheme” at UBS. He detailed the scheme to investigators from the U.S. Senate, the IRS and the Securities and Exchange Commission. He was later indicted and pleaded guilty in Fort Lauderdale, Florida, to his role in the UBS conspiracy. In August 2009, he was sentenced to 40 months in prison, 10 months more than prosecutors sought. He asked President Barack Obama to reduce his sentence, saying he was treated unfairly as a whistle-blower.
Raoul Weil: A former chief executive officer of global wealth management at UBS, Weil was indicted in November 2008 in Fort Lauderdale on a charge of helping wealthy Americans hide assets from the IRS. He was declared a fugitive in January 2009.
Markus Walder: The former head of North America offshore banking, Walder was one of seven Credit Suisse bankers indicted July 21. He hasn’t responded in court to the charges.
Susanne Ruegg Meier: A former member of senior management at Credit Suisse, Meier was one of seven bankers indicted July 21. She hasn’t responded in court to the charges.
Andreas Bachmann: A former manager at Credit Suisse, Bachmann was one of seven bankers indicted July 21. He hasn’t responded in court to the charges.
Marco Adami: Another of the seven Credit Suisse bankers indicted July 21, he’s an Italian national and was a member of senior management who catered to high-net-worth clients in North America, prosecutors allege. He hasn’t responded in court to the charges.
Emanuel Agustoni: One of the seven indicted July 21, he’s a Swiss citizen who left Credit Suisse and continued the fraud at two other private Swiss banks, prosecutors alleged. He hasn’t responded in court to the charges.
Michele Bergantino: One of the seven bankers indicted July 21, he worked at Credit Suisse from 1982 to 2009, according to prosecutors. A Swiss citizen, he hasn’t responded in court to the charges.
Roger Schaerer: Another of the seven Credit Suisse bankers indicted July 21, he is a Swiss citizen who worked in New York. He hasn’t responded in court to the charges.
Josef Dorig: The founder of a Swiss trust company, Dorig was indicted July 21 with the seven Credit Suisse bankers. He helped U.S. customers of Credit Suisse open secret accounts and set up nominee accounts in tax havens, according to the indictment. He hasn’t responded in court to the charges.
Renzo Gadola: A UBS banker from 1995 to 2008, Gadola pleaded guilty on Dec. 22, admitting he conspired with a Swiss banker to encourage U.S. clients to move undeclared UBS accounts to Basler Kantonalbank, based in Basel, Switzerland. Gadola admitted he and the banker, who worked at UBS, told clients not to join the IRS amnesty program for Americans to declare offshore accounts. Gadola, who serviced hundreds of undeclared accounts at UBS, has cooperated with prosecutors in a bid for leniency. Former UBS banker Martin Lack was indicted on a charge of conspiring with Gadola, who faces sentencing in federal court in Miami.
Martin Lack: A former UBS banker, Lack was indicted Aug. 2 on a charge of conspiring to help Americans evade taxes by hiding accounts in a smaller Swiss regional bank. That bank, not named in the indictment, is Basler Kantonalbank, according to a person familiar with the matter. Lack, a Swiss resident and independent investment adviser, is accused of conspiring with Renzo Gadola, a former UBS banker who pleaded guilty Dec. 22. Lack hasn’t responded in federal court in Fort Lauderdale to the charge.
Christos Bagios: A Credit Suisse banker, he was charged in January with helping 150 American clients hide as much as $500 million in assets from U.S. tax authorities when he worked at UBS, where he spent more than 15 years. A Greek citizen who lived in Switzerland, he’s free on bail in south Florida.
Gian Gisler: A former UBS banker, Gisler was indicted Aug. 4 on a charge of conspiring to help at least 38 U.S. clients use Swiss banks to hide more than $215 million from the IRS. He has not responded in federal court in New York to the charge.
Beda Singenberger: A Swiss financial adviser, Singenberger was indicted July 21 on a charge of conspiring with more than 60 U.S. taxpayers to hide more than $184 million from the IRS in offshore accounts. After the UBS criminal probe became known in 2008, he helped clients hide their accounts in other Swiss banks, prosecutors charged. A Swiss resident, Singenberger has not responded in federal court in New York to the charge.
Hansruedi Schumacher: A former Neue Zuercher Bank AG manager who once ran the cross-border business for UBS, Schumacher was indicted in August 2009 in Fort Lauderdale on a charge of helping U.S. citizens evade taxes on UBS and NZB accounts. He was declared a fugitive in December 2009.
Matthias Rickenbach: A Zurich lawyer, Rickenbach was indicted with Hansruedi Schumacher in August 2009 on a charge of helping Americans evade taxes on UBS and NZB accounts. He was declared a fugitive in December 2009.
Mario Staggl: A Liechtenstein investment adviser at New Haven Trust Co., Staggl was indicted with Bradley Birkenfeld in April 2008 on a charge of helping wealthy Americans evade taxes. He was declared a fugitive in May 2008.
Felix Mathis: A Swiss lawyer, he was indicted in July 2010 on charges that he helped a Virginia surgeon, Andrew Silva, hide assets from the IRS and smuggle $235,000 into the U.S. He has not responded to the charge in federal court in Alexandria.
Igor Olenicoff: A billionaire real-estate developer, Olenicoff pleaded guilty in December 2007 in Santa Ana, California, to filing a false tax return. He failed to declare accounts at UBS, where he once had $200 million. He received two years’ probation and paid $52 million in back taxes, interest and penalties.
Jules Robbins: A retired watch distributor from Jericho, New York, Robbins pleaded guilty in April 2010 in New York, admitting he failed to declare a UBS account with $42 million in 2007. He was sentenced in September 2010 to a year of probation. He paid a $20.8 million civil penalty and a $2,000 fine.
Federico Hernandez: A financial adviser who ran 2020 Emerging Inc., Hernandez pleaded guilty in April 2010 in New York. He admitted to setting up sham accounts in the British Virgin Islands and Panama to hide his UBS accounts worth $8.8 million in 2006. He was sentenced in September 2010 to one year in prison and six months of home confinement, fined $4,000 and ordered to pay $84,423 in restitution to the IRS. He agreed to pay a civil penalty of $4.4 million. He also pleaded guilty in state Supreme Court in New York and was fined $25,000.
Jack Barouh: The former owner of a watch company sold to Fossil Inc. for about $50 million, Barouh pleaded guilty in February 2010 to failing to disclose about $10 million at UBS. He was sentenced in Miami in April 2010 to 10 months in prison and fined $5,000.
Kenneth Heller: A disbarred New York maritime attorney, Heller pleaded guilty on June 27 to hiding more than $26.4 million in accounts at UBS and Wegelin & Co., a Swiss private bank. Heller, who admitted to tax evasion in federal court in New York, agreed to pay more than $9.8 million in civil penalties. He opened his UBS account in December 2005 and had $26.4 million wired in from the U.S., prosecutors said. After reading in June 2006 that UBS might disclose the names of its account holders to the U.S. government, he transferred funds to Wegelin, which didn’t have a U.S. office. He awaits sentencing.
Sybil Nancy Upham: A New York resident, Upham was charged in April 2010 with hiding UBS accounts worth $11.3 million in 2007 and later moving $8.5 million to a Liechtenstein bank. She pleaded guilty in November 2010 to filing false tax returns and conspiring to defraud the IRS in various ways, including by smuggling cash into the U.S. from Europe. She awaits sentencing in federal court in New York.
Samuel Phineas Upham: The son of Sybil Nancy Upham, he was indicted in October 2010 on charges that he helped his mother hide more than $11 million through a UBS account. He also was charged with smuggling $450,000 in cash from UBS’s offices in Zurich to the U.S. He pleaded not guilty in federal court in New York.
Michael Reiss: A cancer researcher, Reiss pleaded guilty on Aug. 5 in federal court in New York to failing to file reports of foreign bank and financial accounts, known as FBARs, and hiding millions of dollars at UBS and other Swiss banks. His account was valued at $2.59 million in 2008. He agreed to pay back taxes of $400,000 and an FBAR penalty of more than $1.2 million. Prosecutors say he used the services of Beda Singenberger, the Swiss financial adviser indicted July 21. Reiss awaits sentencing.
Robert Greeley: A San Francisco resident, Greeley pleaded guilty on Aug. 3 to filing a false tax return that failed to disclose more than $13 million in accounts at UBS. Greeley, who admitted that banker Renzo Gadola helped him set up his accounts, agreed to pay more than $6.8 million in FBAR penalties. He awaits sentencing in federal court in San Francisco.
Arvind Ahuja: A neurosurgeon from Greendale, Wisconsin, Ahuja was indicted on Sept. 28 on charges that he failed to declare an HSBC India account valued at $8.7 million. A federal grand jury in Milwaukee charged him with conspiring with two HSBC India bankers to defraud the IRS from 2006 to 2009. He denies wrongdoing.
Sean and Nadia Roberts: A married couple from Tehachapi, California, who operate a school for test pilots, the Robertses pleaded guilty on June 20 to filing a false tax return that failed to disclose accounts at UBS and the Swiss branch of a Liechtenstein bank. They also admitted having numerous undeclared accounts in South Africa and New Zealand. They await sentencing in federal court in Fresno, California.
Anton Ginzburg: A New York podiatrist, Ginzburg pleaded guilty July 14 to failing to file an FBAR for a UBS account with $3.11 million. Ginzburg agreed to pay a civil penalty of $1.56 million. He awaits sentencing in federal court in Brooklyn, New York.
Peter Schober: A Boston resident in the investment management business, he pleaded guilty in November 2010 to failing to file an FBAR disclosing a UBS account with more than $1 million. He was sentenced Oct. 5 in federal court in Boston to one month in prison and two months of house arrest. He was fined $3,000 and agreed to pay a civil penalty of $777,986.
Michael F. Schiavo: A managing director at SCG Consulting Group in Boston, Schiavo pleaded guilty June 27 to failing to file an FBAR that disclosed an account at HSBC Bank Bermuda. Schiavo admitted he didn’t declare taxable income he got from a venture capital investment that involved a business partner, Peter Schober, who also pleaded guilty. Schiavo, who agreed to a civil penalty of $76,283, awaits sentencing in federal court in Boston.
Josephine Bhasin: A resident of Huntington, New York, Bhasin pleaded guilty on April 13 to filing a false tax return that failed to report an HSBC India account worth $8.3 million. She awaits sentencing in federal court in Central Islip, New York.
Harry Abrahamsen: A New Jersey businessman, he pleaded guilty in April 2010 in Newark, New Jersey, to failing to file an FBAR to disclose a UBS account with almost $800,000. He was sentenced May 24 to three years of probation, including one year of home confinement. He agreed to pay a civil penalty of more than $300,000.
Lucille Abrahamsen Jackson: The daughter of Harry Abrahamsen, she pleaded guilty in Newark in November 2010 to filing a false tax return and failing to file an FBAR that disclosed a UBS account valued at $759,376 in 2003. She was sentenced May 23 to one year of probation and agreed to pay a civil penalty of more than $379,000.
Steven Michael Rubinstein: A Florida accountant who worked at an international yacht company, he pleaded guilty in June 2009 to filing a tax return that failed to disclose UBS accounts that held at least $7 million. A federal judge in Miami sentenced him in October 2009 to 12 months of home detention.
Robert Moran: A Florida yacht broker, he pleaded guilty in Fort Lauderdale in April 2009 to filing a tax return that failed to disclose $3.4 million held at UBS. He was sentenced in November 2009 to two months in prison and five months of home detention.
Jeffrey Chernick: A New York toy salesman, Chernick pleaded guilty in July 2009 to filing a false tax return that hid $8 million at UBS. In his plea, Chernick implicated four others in detailing a $45,000 bribe paid to a Swiss government official. In October 2009, he was sentenced in Fort Lauderdale to three months in prison. The judge later reduced his term to one month.
Juergen Homann: A New Jersey businessman, Homann admitted in September 2009 in Newark that he failed to file an FBAR to disclose a UBS account with as much as $6.1 million in assets. He was sentenced in January 2010 to five years’ probation and fined $60,000.
John McCarthy: A California businessman, McCarthy pleaded guilty in Los Angeles in October 2009 to failing to file an FBAR for a UBS account with more than $1 million. He was sentenced in March 2010 to six months of home detention, with 300 hours of community service and a $25,000 fine.
Roberto Cittadini: A former sales manager at Boeing Co., the resident of Bellevue, Washington, pleaded guilty in October 2009 to failing to file an FBAR and filing a false tax return that hid income on $1.86 million in assets at UBS. He was sentenced in Seattle in January 2010 to one year of probation, including six months of home detention, and 200 hours of community service. He was fined $10,000 and ordered to pay $17,985 in restitution.
Richard Werdiger: A diamond and jewelry seller, Werdiger pleaded guilty on March 11 to charges that he hid more than $7.1 million in UBS accounts from the IRS. He agreed to pay a civil penalty of $3.5 million. He pleaded guilty to an indictment charging that from 1986 to 2000, Werdiger opened UBS accounts through sham entities in Panama and Liechtenstein, and communicated with the bank using the code name “Trygon.” He awaits sentencing in federal court in New York.
Ernest Vogliano: A New York restaurateur, Vogliano pleaded guilty in December 2010 to filing false tax returns that hid $4.9 million he held at UBS. Vogliano, the owner of Il Vagabondo, paid a civil penalty of more than $940,000. He was sentenced April 21 to two years of probation and fined $10,000.
Shmuel Sternfeld: A resident of Tel Aviv, Sternfeld opened a UBS account in 2004 in the name of a Hong Kong shell corporation, prosecutors said in an April 2010 indictment. Sternfeld transferred money to buy a condominium in Florida and later moved funds to an account in the Czech Republic, prosecutors said. His account was valued at $2.9 million in 2005. He hasn’t responded in federal court in New York to the charges.
Leonid Zaltsberg: A former UBS client who helped lead his Ukrainian soccer team to six Soviet championships, he pleaded guilty in July 2010 in Newark to failing to tell U.S. authorities about $2.6 million in an offshore account. He was sentenced in December 2010 to 12 months of home confinement and fined $3,000.
Paul Zabczuk: A resident of The Woodlands, Texas, Zabczuk pleaded guilty in Fort Lauderdale in April 2010 to charges that he filed a false tax return and didn’t disclose his UBS account. He was sentenced in July 2010 to one year of home detention and fined $2,000.
Bernard Goldstein: A resident of Carlsbad, California, who exports oil pipeline products to Russia, he was indicted in November 2010 on charges of conspiracy, filing false tax returns and failing to file FBARs. Prosecutors said his UBS account held more than $2.5 million in 2003. He hasn’t responded to the charges in federal court in San Diego.
Gregory Rudolph: A resident of Brookline, Massachusetts, he was charged in October 2010 with failing to file FBARs on a UBS account that held at least $1.5 million. He pleaded guilty in federal court in Boston on Feb. 23 and agreed to pay a civil penalty of $980,065. He awaits sentencing.
Jeffrey Chatfield: A California consultant who advised private companies seeking to go public, Chatfield pleaded guilty in November 2010 to failing to file FBARs and declare accounts at Credit Suisse and UBS, where he once had assets of more than $900,000. He was sentenced March 14 to three years of probation and ordered to pay a civil penalty of $96,269.
Andrew Silva: A Virginia surgeon, he pleaded guilty in February 2010 to conspiring with an HSBC banker and a Zurich attorney to hide a $250,000 account from the IRS by smuggling 26 cash payments to the U.S. Silva was sentenced in Alexandria in June 2010 to four months of home detention, fined $20,000, forfeited $211,200 and paid $16,484 in back taxes.
Vaibhov Dahake: A New Jersey businessman, he pleaded guilty in April to conspiring with five HSBC bankers to hide his Indian accounts from the IRS. He admitted to conspiring with two bankers in New York, one in Fremont, California, and two in Thane, India. He awaits sentencing in federal court in Newark.
Edward Gurary: The chief executive officer of Dighton Capital Management, he pleaded guilty in March to hiding accounts at UBS and Credit Suisse from the IRS. He admitted he controlled a UBS account that held as much as $947,000. He awaits sentencing in federal court in Cleveland.
Arthur Joel Eisenberg: A resident of Seattle, he pleaded guilty in December 2010 to filing a false tax return that failed to disclose UBS accounts that prosecutors said held as much as $4.2 million. In March, he was sentenced in federal court in Seattle to three years of probation and fined $25,000. He also was ordered to pay an FBAR penalty of $2.1 million.
--Editors: Andrew Dunn, Stephen Farr
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