Another UBS Client Sentenced (10/6/11)

Another UBS client, Peter A. Schober, was sentenced on 10/5/11.  I blogged the original charges, Other UBS Account Holders are Charged (10/28/10), here.  The following are the key bullet points as of now:

Taxpayer: Peter A. Schober
Bank: UBS
Entities: ?
Guilt: By Plea Agreement - 1 Count FBAR violation.
Sentence: 1 month incarceration; 2 months home; 6 months supervised release
Unreported Income: ?
Tax Loss: $77,870.67
FBAR Penalty: $773,652
Court: D MA
Judge: Nathaniel M. Gorton

I will supplement these bullet points when more information is available.  I will also update the spreadsheet at that time.

Another UBS Client Pleads -- With the Baggage of Illegal Income (9/27/11)

Michael A. Hase, a former comptroller for the U.S. Agency for International Development, has pled guilty to Theft of Government Property and Tax Perjury. The bullet points are below, but I caution the reader that this is an illegal source income case where the Government's main angst is about the conduct underlying the Theft Count. This limits the ability to make inferences to legal source income as is the bulk of the cases involving the current offshore financial account initiative. Notwithstanding that, since the tax Guidelines produced the highest offense level, the tax Guidelines governed with one level added for the theft crime. I link the Information here, the Plea Agreement here, the Statement of Facts here, and the USAO Press Release here.

Taxpayer: Michael A.Hase
Bank : UBS AG and its predecessor Swiss Bank Corporation Jersey Islands;
Entities: No
Guilt: By Plea Agreement - 2 counts - theft of government property 18 USC 641 (one count); tax perjury (Section 7206(1)) (1 count covering 10 years).
Maximum Incarceration Period: 13 years (10 years on theft count; 3 years on tax count)
Admits: Failure to File FBARs but not charged or pled
Unreported Income: $909,156.66
Tax Loss: $254,564.14
FBAR Penalty: $1.937,934.53 + (Based on 50% of the indicated highest balance of $3,875,934 in 2006).
Offense Level (Before AOR): 21 (20 for tax count plus 1 for multiple offense)
Offense Level After AOR: 18 (Criminal History I).
Guidelines Range: 27 - 33 months
Restitution: $36,325.52 (for theft count)
Court: D DC.
Judge: ?
Read more »

Yet another plea deal for UBS Depositor (8/6/11)

Taxpayer: Michael Reiss
Bank : UBS AG; two other unidentified Swiss bank, but one is pseudonymed "Swiss Bank No. 1"
Swiss Enabler: Beda Singenberger (see blogs here)
Entities: Yes (sham foundation and apparently sham corporation)
Guilt: By Plea Agreement - False FBAR (1 count)
Maximum Incarceration Period: 5 years.
Admits: Other false FBARs and failure to file FBARs
Tax Loss: $400,000 (at least)
FBAR Penalty: $1,200,000 + (FBAR penalty; perhaps 50% of highest balance for one year).
Court: SD NY
Judge Accepting Plea: Henry B. Pitman, Magistrate Judge, USDC SDNY
Read more »

Another UBS Related Enabler is Indicted (8/5/11)

Yesterday brought another UBS enabler indictment against Gian Gisler, a resident of Zurich, Switzerland.  Here is the USAO SDNY Press Release.  I haven't had time yet to analyze the details and will probably wait until I get a copy of the indictment (if anyone has it please email it to me).  In the meantime, I just cut and paste the part of the press release summarizing the indictment:

From the mid 1990s until late 2008, Gisler was a client adviser at UBS. From early 2009 until at least 2010, Gisler was a client adviser at two different asset management firms (Swiss Asset Management Firm No. 1 and Swiss Asset Management Firm No. 2). From the mid-1990s through at least 2010, Gisler allegedly conspired with various U.S. taxpayers and others to ensure that his clients could hide their Swiss bank accounts and the income they generated from the IRS.

In 2001, UBS, one of the Swiss banks at which Gisler helped his U.S. taxpayer clients hide accounts, voluntarily agreed with the IRS to collect information from account holders concerning the true owners of accounts at those banks. In furtherance of the conspiracy, Gisler, together with his U.S. taxpayer clients and others, used sham entities created under the laws of countries other than the United States to hide from the IRS the Swiss bank accounts, and the income they generated, and to circumvent the commitments that UBS and, later, other Swiss banks, had made to the IRS.

Read more »

Class Action Suit by U.S. Depositors in UBS (8/4/11)

A class action suit has been filed against UBS in the North District of Illinois. The complaint is here. The class of plaintiffs includes certain U.S. depositors in UBS who held account(s) from 2002 - 2008 and who attempted to join an IRS voluntary disclosure program. The complaint contains the expected allegations of skullduggery. I have cut and paste below certain allegations regarding the class of plaintiffs and the plaintiff's lawyers (some of the formatting is not perfect).

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

MATTHEW THOMAS and HIMANSHU                                NO. 1 :11-cv-4798
PATEL, on their own behalf and on behalf
of all others similarly situated,
                                                                                                 PLAINTIFFS' ORIGINAL
                                                                                                 CLASS ACTION COMPLAINT
       PLAINTIFFS,

v.                                                                                              JURY TRIAL DEMANDED

UBS AG,

        DEFENDANT.

PLAINTIFFS' ORIGINAL CLASS ACTION COMPLAINT

* * * *

III.
CLASS ALLEGATIONS

9. Plaintiffs bring this action on their own behalf and, pursuant to Rule 23(b)(l)(A), (b )(2), and/or (b )(3) of the Federal Rules of Civil Procedure, as a class action on behalf of themselves and the nationwide class of all persons (the "Class Members," the "alleged class" or the "Class") defined below against Defendant:

[*3]

All United States citizens who held an account in Switzerland with UBS at any time from 2002 through 2008 and who have paid or offered to pay the United States Internal Revenue Service ("IRS") back-taxes and penalties and/or interest under the 2009 IRS Voluntary Disclosure Initiative or similar program as a result of not disclosing or declaring such Swiss account to the IRS or not paying income tax to the IRS derived from such Swiss Account. This Class is intended to include all persons who went to Switzerland to open the Swiss Account; opened the Swiss Account from the United States or any other place outside of Switzerland; inherited the Swiss Account; or came into ownership of possession of the Swiss Account through any other means or circumstances.

Read more »

Yet Another Plea Deal on UBS Offshore Accounts (8/3/11)

Taxpayer: Robert E. Greeley (prior blog here).

Bank : UBS AG
Swiss Enabler: Renzo Gadola (see blogs here)
Entities: Yes
Guilt: By Plea Agreement - tax perjury (Section 7206(1)) - 1 count for 2008.
Maximum Incarceration Period:  3 years.
Admits: Failure to File FBARs but not charged or pled
Unreported Income: $734,000 (Interest) (all relevant conduct years between 2002 and 2008)
Tax Loss: ?
FBAR Penalty: $6,800,000 + (FBAR penalty; unclear whether 50% of highest balance for one year).
Court: ND CA (San Francisco)
Judge: Charles R. Breyer

Article.
David Voreacos, Ex-UBS Client Greeley Admits to Concealing $13 Million in U.S. Tax Dodge (Bloomberg 8/3/11).

New Swiss Enabler Indictment (8/2/11)

Today brings a new Swiss enabler Indictment in the Southern District of Florida, a hotbed of the DOJ juggernaut against banks and enablers. Martin Lack, a citizen and resident of Switzerland, was indicted for the defraud / Klein conspiracy. The indictment is here. 

Lack operates Lack & Partner Asset Management AG in Zurich and is a confederate of Renzo Gadola, previously indicted and blogged here.

As is the way with defraud / Klein conspiracy indictments, Lack's indictment is flowered up with a lot of detailed allegations of skullduggery presented as overt acts. These are just variations on the themes of how far the -- at least some -- Swiss bankers went to accommodate the U.S. clients' needs to hide their tax evasion (for a share of the ill-gotten gains, of course). For example, it is alleged that Lack solicited cash deposits in the U.S. in furtherance of the scheme and further failing to file the required Form 8300.  Thus, the following allegation:

26. It was further a part of the conspiracy that defendant MARTIN LACK and his conspirators would and did assist United States customers with undeclared Swiss accounts at Cantonal Bank in structuring the transfer of funds, including cash, within the United States without disclosing such transfers to the United States government on a Form 8300 as required by law.

Read more »

Criminal Charges for More Swiss Bank Enablers (7/21/11)

Criminal Charges surfaced today for more offshore bank account enablers.  The first involves Credit Suisse and the second involves UBS.

1. Credit Suiss Related Indictments,

In a superseding indictment, the following were charged with one count of conspiracy:

Markus Walder
Marco Parenti Adami
Susanne D. Ruegg Meier
Roger Schaerer
Emanuel Agustoni
Michele Bergantino
Andreas Bachman (aka Andrew Bachman and aka Andy Bachman)
Josef Dorig

The original indictment named only Adami, Agustoni, Bergantino and Schaerer. (I discussed the original indictment in a prior blog, More enablers indicted (2/23/11).) The superseding indictment is 47 pages long. According to my prior blog, the International Bank identified in the original indictment was Credit Suisse. Presumably that is the case with the superseding indictment as well.
Read more »

U.S. Is Reported to Have Abandoned Negotiations with Swiss (7/18/11)

Rumors previously circulated that the Swiss Government and the U.S. were negotiating to reach their own version of the "grand bargain" over Swiss skullduggery in secret bank accounts for U.S. depositors. See U.S. Swiss Negotiations for Multi-Bank Settlement on Swiss Bank Enabled U.S. Tax Evasion (6/11/11). Now the rumors are that U.S. terminated the negotiations. (One could have speculated as much from the announcement that the U.S. is stepping up its investigation of Credit Suisse. See DOJ Investigating Credit Suisse (7/15/11) .

The following are excerpts from a Reuters report (Swiss-US tax talks flounder as CS probed-paper (Reuters 7/17/11)) which cites a Swiss newspaper.  The key points are (although I remind readers that this is probably the Swiss spin on matters):

1. "Citing unnamed banking sources, the Tages-Anzeiger daily said that negotiations between Switzerland and the United States had stalled because the U.S. Department of Justice was not particularly interested in a deal."
Read more »

Swiss Court OKs UBS Initial Turnover of 255 U.S. Depositor Information (7/16/11)

The Swiss Federal Supreme Court has approved the initial turnover of 255 UBS depositor information approved by FINMA, thus overturning a prior holding of a lower court. The Swiss press release is here (in German on pp. 1&2 and in English on pp. 3&4.  I quote the English translation of the press releave in full:

Press Release of the Swiss Federal Supreme Court

Judgment of 15 July 2011 (2C_127/2010)

Disclosure of UBS customer data by FINMA to the US Department of Justice ruled lawful

On February 18, 2009, FINMA, the Swiss Financial Market Supervisory Authority, ordered that the data of 255 UBS customers be disclosed to the US Department of Justice. In its public deliberation of July 15, 2011, the Swiss Federal Supreme Court ruled that FINMA’s actions were lawful. In doing so, it reversed the ruling handed down by the Swiss Federal Administrative Court and upheld FINMA’s order.

FINMA ordered that the data of 255 UBS customers be disclosed to the US Department of Justice as a protective measure pursuant to articles 25 and 26 of the Banking Act. In doing so, it proceeded on the assumption that if this data hadn’t been disclosed, the US Department of Justice would have filed an indictment against UBS, which would arguably have caused the bank’s ruin and consequently have had serious repercussions for the Swiss economy.

Read more »

Another UBS client Pleads Guilty (7/15/11)

Taxpayer: Anton Ginzburg
Banks : UBS AG
Entities: ?
Guilt: By Plea Agreement - failure to file FBAR (maximum incarceration 5 years).
Tax Loss: Not specified in the press release.
FBAR Penalty: $1,552,606.50 (50% of highest amount (which readers will recall is standard for plea deals).
Court: ED NY
Judge: U.S. Magistrate Judge Robert Levy

The USAO ED NY press release is here. 

News Reports:
Thorn Weidlich, Ex-UBS Customer Pleads Guilty to Hiding Swiss Bank Account (Bloomberg 7/14/11)

I will try to get the court documents and supplement this information and the spreadsheet later.  I will also probably post links to other news reports or comments.

A New UBS Depositor Plea in SDNY (6/27/11)

The USAO SDNY press release is here. The plea agreement is here. 

Taxpayer: Kenneth Heller, Age 81.
Banks : UBS AG and Wegelin & Co.
Entities: Yes.
Guilt: By Plea Agreement - tax evasion (3 counts - maximum potential incarceration 15 years).
Other Charges and Potential Charges: If from the underlying conduct they are either dismissed if charged or will not be charged. But, "this Agreement does not bar the use of such conduct as a predicate act or as the basis for a sentencing enhancement in a subsequent prosecution including, but not limited to, a prosecution pursuant to 18 U.S.C. §§ 1961 et seq."
Tax Loss: Not specified, but plea agreement requires that, by sentencing, defendant file accurate returns for 2007 and 2008. The agreement further requires defendant pay taxes "on such terms and conditions as will be agreed upon between the defendant and the IRS."
Civil fraud penalty: Defendant stipulates to the civil fraud penalty.  (This is oddly worded; the parties have not agreement upon the civil tax liability to which the civil fraud penalty applies; there is often some portion of the civil tax liability that is not subject to the civil fraud penalty; it is unclear whether the defendant will be able to so assert, but I think the language used will permit him to do so.)
FBAR Penalty: The plea agreement says 50% of highest amount (which readers will recall is standard for plea deals).  The plea agreement says, based on information then available, is $9,816,000. This amount can be adjusted for other information. (This is curious because the DOJ Tax press release says that $26,420,822.43 went into one of the accounts.)
Sentencing Factors: Base offense level of 20 (based upon tax loss of between $400,000 and $1,000,000); sophisticated means +2; acceptance of responsibility -3 (but Government can contest if by and during allocution he does not accept responsibility); criminal history category I; indicated sentencing range 30-37 months; the Government agrees that a sentence below the Stipulated Guidelines Range is warranted in this case.
Court: SD NY
Judge: P. Kevin Castel

Additional
Thomson Reuters Press Report of 6/27/11.

Another UBS Charge and Guilty Plea - Husband and Wife (6/21/11)

Yet another plea was entered yesterday. The DOJ Tax Press Release is here. The key facts form the DOJ Tax Press Release and the Plea Agreements (below) are.

Taxpayers: Sean Roberts & Nadia Roberts, husband and wife.
Banks : UBS AG, an unnamed Isle of Man Branch of UK bank, an unnamed Lichtenstein bank, an unnamed Hong Kong bank, an unnamed bank in New Zealand and an unnamed bank in South Africa.
Entities: Yes.
Guilt: By Plea Agreement - Tax Perjury (one count).
Tax Loss:  $709,765 (includes relevant conduct beyond the year of conviction)
Restitution: $709,675 (joint between the two; will be credited to tax due)
Cooperation:  Agreement to cooperate in (i) determining tax liability for 2003 forward (note the tax loss and restitution are just a floor.); and (ii) in "investigation and proseuction of other individuals involved in possible violation of federal and state law."  The latter is coupled with the usual non-committal 5K1.1 departure for cooperation.
Enablers (in addition to the banks):  Isle of Man cororate and trust services company; UBS BANKER C.U.; ACCCOUNT MANAGER B.S., owner of a Zurich based financial services company.  (Substantial in U.S. activity by the individuals.)
FBAR penalty: 50% of highest amount for one year.
Court: ED CA.
Judge: Anthony W. Ishi.

Documents:
Husband Information
Husband Plea Agreement
Wife Information
Wife Plea Agreement

Another Criminal Charge for UBS Depositor (6/16/11)

I present for readers another charge against yet another UBS depositor. This time the case is United States v. Robert E. Greeley (N.D. CA CR 11 0374 CRB). The case is apparently assigned to Judge Charles R. Breyer, brother of Supreme Court Justice Stephen Breyer.

The charge is by information which suggests that there is a plea deal afoot. The charge is to one count of tax perjury for the year 2008. The bank is UBS. I know of little else when this blog is first posted, will add key points to this blog as I learn them.
Read more »

IRS Ratchets Up Its Focus on the Enablers (6/2/11)

Observers of the IRS offshore financial account initiative have known for a long time that the IRS had its sights on enablers (persons who promoted and enabled taxpayers into offshore accounts for U.S. tax evasion purposes). In the template letter required in the two programs, participants were required to identify enablers. Then IRS then took that information and built databases of names and relationships that could identify the signficiant enablers. At least anecdotally, practitioners observed that the IRS seemed to be particularly interested in enablers who had some U.S. presence -- particularly, as in the case of the UBS enablers, those who moved into and out of the country in stealth mode to sell their evasion services. This is probably not new to most of the professional readers of this blog.

In a very good article, a Bloomberg Business Week reporter discusses some of the IRS's efforts. The article is David Voreacos,The IRS Grills Taxpayers on Offshore Accounts, Bloomberg Businessweek (6/2/11). It is not a long article and is well-written, so I just link to it for you. 
Read more »

The State of the John Doe Treaty Request to Switzerland (6/1/11)

U.S. double tax treaties have an exchange of information provision. After the U.S. put the full court press on UBS (John Doe Summons and criminal investigation), the matter was finally resolved with a deferred prosecution agreement for UBS (with a whopping fine) and an agreement with the Swiss government that it would process a John Doe treaty request -- i.e., a request for U.S. taxpayers identified only by characteristics (e.g., size of account and use of non-U.S. entities)). Because, prior to that time, Switzerland interpreted the US - Swiss double tax treaty restrictively, this solution required a treaty protocol. At more or less the same time, efforts at more transparency from tax haven jurisdictions were pursued by OECD and G-20 Ministers of Finance. The result is that Switzerland is trying to give the appearance of opening the kimono. (That is different than actually opening the kimono.)

All of this is laid out (or at least suggested) in the Joint Committee on Taxation, Explanation of Proposed Protocol to the Income Tax Treaty Between the United States and Switzerland (JCX-31-11), May 20, 2011. I recommend this report as an excellent summary of the issues with Switzerland and an historical summary of the developments in this area.
Read more »

John Doe Summonses & Statutes Of Limitations (5/27/11)

This week, a district court denied an IRS request for an order authorizing issuance of a John Doe Summons.  Readers will recall that Section 7609(f) permits the IRS to issue John Doe Summonses seeking tax related information and documents about unknown taxpayers. These taxpayers are unknown, so the IRS cannot give notice to the taxpayers who can then contest the summons. So, Congress required that a federal district judge approve the issuance of the summons.

The IRS sought the court order authorizing it to serve a John Doe summons to the California Board of Equalization for certain a certain discrete record set that would help the IRS identify persons making gift transfers to non-spouse related parties which, the IRS imagined, might have compliance issues with the gift tax. I won't get into the details of the focus of the IRS's interest, since the principal focus would be civil compliance initiatives. The judge refused to authorize the summons, finding that the IRS had not shown that the information and documents were not otherwise reasonably available. Further, although dismissing the motion for authorization without prejudice on the basis stated, the Court cautioned that, if the IRS were to repackage the motion, the court had some serious concerns about whether the IRS could otherwise qualify.  The opinion is here.
Read more »

Another UBS Client is Sentenced - 1 Yr Home Detention (5/24/11)

Taxpayer: Harry Abrahamsen
Banks : UBS AG
Entities: Yes
Guilt: By Plea Agreement - FBAR violation (one count)
Incarceration (in months): 0
Home Detention: 1 year
Probation: 3 years (apparently including the home detention)
FBAR penalty: $300,000 +
Fine: ?
Court: D NJ
Judge: Denis Cavanaugh
Age at sentencing: 69

Articles:
USAO D NJ Press Release

His daughter, Lucille Abrahamsen Jackson, was sentenced yesterday.  See blog on her sentencing here.
Read more »

Another UBS Client is Sentenced to Probation (5/23/11)

Taxpayer: Lucille Abrahamsen Jackson
Banks : UBS AG
Entities: Yes
Guilt: By Plea Agreement - Tax Perjury (one count)
Incarceration (in months): 0
Probation: 1 year
FBAR penalty: $379,688
Fine: ?
Court: D NJ
Judge: Denis Cavanaugh
Age at sentencing: ?

Articles:
USAO D NJ Press Release
Read more »

Another UBS Client is Sentenced (4/23/11)

Taxpayer: Ernest Vogliano
Banks : UBS AG
Entities: Yes
Guilt: By Plea Agreement - Klein conspiracy (one count) and tax perjury (five counts)
Incarceration (in months): 0
Probation: 2 years
FBAR penalty: $940,381
Fine: $10,000
Court: SD NY
Judge: Thomas Griesa
Age at sentencing: 80

Articles:
Reuters
Wall Street Journal

I will update the spreadsheet tomorrow.