UBS, U.S., Swiss Complete Tax-Evasion Settlement
"Regulatory Arbitrage", as Eric Hughes liked to call it on cypherpunks, is officially dead. Cheers, RAH -------- <http://online.wsj.com/article/SB125007792394025747.html?mod=djemTEW#printMod...
The Wall Street Journal AUGUST 12, 2009, 5:22 P.M. ET UBS, U.S., Swiss Complete Tax-Evasion Settlement By CARRICK MOLLENKAMP and LAURA SAUNDERS Swiss bank UBS AG and the U.S. and Swiss governments have settled a long-running tax-evasion probe, a Justice Department attorney told a federal court Wednesday morning. Details of the pact were not provided during a teleconference with U.S. District Judge Alan Gold. Justice Department attorney Stuart Gibson said initial documents had been signed and final forms were awaiting signatures. It's likely UBS will turn over thousands of client names to the Internal Revenue Service as part of the settlement. The case centers on the Internal Revenue Service's efforts to obtain the identities of some 52,000 accounts so the revenue collector can investigate off- shore tax evasion by UBS clients. UBS, in a statement, declined to discuss the details. The Zurich bank said it welcomed the agreement. Justice Department representatives weren't immediately available for comment. A statement by IRS Commissioner Doug Shulman provided a sense of timing on releasing details of the pact. Mr. Shulman said, "We will release more details when the Swiss government signs the agreement as early as next week." UBS and the Swiss government had fought the effort, citing Swiss bank privacy. Lawyers involved in the case now believe UBS will agree to turn over some 8,000 to 10,000 account identities. The parties first officially said they were in talks in mid-July. That set off a month of back-and-forth discussions that underscored the difficulty in reaching a pact. A critical component of the settlement will be the process for turning over the names to the IRS. Lawyers representing UBS clients believe that one route may be for UBS to hand the names to the Swiss government, which then would notify the UBS clients that they can appeal in Switzerland. A flurry of clients already had been coming forward through a so- called voluntary disclosure program that allowed them to acknowledge unpaid income tax. That process had saddled the IRS with a flood of paperwork, leading the IRS to recently streamline the process. The settlement could represent a significant victory for the IRS and the Justice Department depending on how many names the IRS obtains. The IRS's case --effectively a civil court request to a federal court to force UBS to provide the accounts -- already had yielded documents detailing the inner workings of how UBS and its vaunted private bank helped U.S. clients. The settlement on Wednesday had run on a parallel track with a criminal inquiry that in February led UBS to agree to a $780 million settlement and to turn over some 250 names.
http://www.usdoj.gov/opa/pr/2009/August/09-tax-825.html Swiss Banking Executive and Swiss Lawyer Charged with Conspiring to Defraud the United States Defendants Aided Wealthy Americans Conceal Assets in Secret Swiss Bank Accounts WASHINGTON - Hansruedi Schumacher and Matthias Rickenbach, both of Switzerland, were indicted today for conspiring to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. According to the indictment, Schumacher worked as an executive manager at Neue Zuercher Bank (NZB), a Swiss private bank located in Zurich, Switzerland. Rickenbach worked as a Swiss attorney who provided legal advice and services to U.S. clients. Both are alleged to have aided wealthy Americans conceal assets and income in Switzerland from United States authorities. According to the indictment, Schumacher and Rickenbach helped wealthy American clients conceal their assets by establishing sham and nominee offshore entities to hide their U.S. clients' assets and income while allowing these clients to still control the assets and make investment decisions. The indictment further alleges that Schumacher and Rickenbach regularly traveled to the United States to conduct banking and investment activities with their U.S. clients and that when they traveled they concealed their business activities in the United States by falsely representing to American authorities that they were traveling to the U.S. for personal reasons. While in the United States, the defendants would sometimes bring cash for their clients. According to court documents, Schumacher and Rickenbach aided their wealthy American clients repatriate money back to the United States using several deceptive means. Schumacher and Rickenbach helped their clients obtain offshore credit cards and created sham loan documents. Additionally, Schumacher and Rickenbach falsified bank documents to generate the appearance that assets of their U.S. clients belonged to Swiss citizens, and they falsified documents to disguise their United States clients' repatriation of offshore funds as inheritances from foreign citizens. According to court documents, Schumacher and Rickenbach discouraged their U.S. clients from voluntarily coming into compliance in the United States. Instead, the defendants encouraged their clients to transfer their assets from UBS, a large Swiss bank, to NZB, a smaller bank in Switzerland. The defendants told their clients that their assets and identification would be safer at NZB because they had no presence in the United States and was therefore less likely to be pressured by the American authorities to disclose the identities of their United States clients.
Note that the defendants are not said to be in custody. I take it then that they are not.
http://www.usdoj.gov/opa/pr/2009/August/09-tax-825.html
Swiss Banking Executive and Swiss Lawyer Charged with Conspiring to Defraud the United States
Defendants Aided Wealthy Americans Conceal Assets in Secret Swiss Bank Accounts
WASHINGTON - Hansruedi Schumacher and Matthias Rickenbach, both of Switzerland, were indicted today for conspiring to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced. According to the indictment, Schumacher worked as an executive manager at Neue Zuercher Bank (NZB), a Swiss private bank located in Zurich, Switzerland. Rickenbach worked as a Swiss attorney who provided legal advice and services to U.S. clients. Both are alleged to have aided wealthy Americans conceal assets and income in Switzerland from United States authorities.
According to the indictment, Schumacher and Rickenbach helped wealthy American clients conceal their assets by establishing sham and nominee offshore entities to hide their U.S. clients' assets and income while allowing these clients to still control the assets and make investment decisions.
The indictment further alleges that Schumacher and Rickenbach regularly traveled to the United States to conduct banking and investment activities with their U.S. clients and that when they traveled they concealed their business activities in the United States by falsely representing to American authorities that they were traveling to the U.S. for personal reasons. While in the United States, the defendants would sometimes bring cash for their clients.
According to court documents, Schumacher and Rickenbach aided their wealthy American clients repatriate money back to the United States using several deceptive means. Schumacher and Rickenbach helped their clients obtain offshore credit cards and created sham loan documents. Additionally, Schumacher and Rickenbach falsified bank documents to generate the appearance that assets of their U.S. clients belonged to Swiss citizens, and they falsified documents to disguise their United States clients' repatriation of offshore funds as inheritances from foreign citizens.
According to court documents, Schumacher and Rickenbach discouraged their U.S. clients from voluntarily coming into compliance in the United States. Instead, the defendants encouraged their clients to transfer their assets from UBS, a large Swiss bank, to NZB, a smaller bank in Switzerland. The defendants told their clients that their assets and identification would be safer at NZB because they had no presence in the United States and was therefore less likely to be pressured by the American authorities to disclose the identities of their United States clients.
Apparently not in custody, the docket shows no record of arrest. The indictment amplifies the means and methods employed, names two clients as co-consiprators and gives the initials of two others as unindicted. Amounts of money involved are pocket change to the biggies here. http://cryptome.org/schumacher/001.pdf Reminds that Jim Bell writes that his invention will likely be worth trillions and will change science, national security and maybe metaphysics. My entire fortune safely stashed under Turks and Caicos is bet on Jim.
participants (3)
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Duncan Frissell -
John Young -
R.A. Hettinga