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Date: Wed, 4 Mar 2009 01:32:55 -0500
From: ed <ber..._at_netaxs.com>
To: TSCM-L2006_at_googlegroups.com
Subject: UBS AG admits using "counter-surveillance techniques" to DOJ
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Thou shalt not use TSCM. [DOJ]
-Ed
"The information further alleges that UBS managers and employees used encry=
pted
laptops and other counter-surveillance techniques to help prevent the detec=
tion
of their marketing efforts and the identities and offshore assets of their =
U.S.
clients."
http://www.usdoj.gov/opa/pr/2009/February/09-tax-136.html
United States Department of Justice
FOR IMMEDIATE RELEASE
Wednesday, February 18, 2009
WWW.USDOJ.GOV
FAX (202) 514-2007
TDD (202) 514-1888
UBS Enters into Deferred Prosecution Agreement
Bank Admits to Helping U.S. Taxpayers Hide Accounts from IRS; Agrees to Ide=
ntify
Customers & Pay $780 Million
WASHINGTON =96 UBS AG, Switzerland=92s largest bank, has entered into a def=
erred
prosecution agreement on charges of conspiring to defraud the United States=
by
impeding the Internal Revenue Service (IRS), the Justice Department announc=
ed today.
As part of the deferred prosecution agreement and in an unprecedented move,=
UBS,
based on an order by the Swiss Financial Markets Supervisory Authority (FIN=
MA),
has agreed to immediately provide the United States government with the
identities of, and account information for, certain United States customers=
of
UBS=92s cross-border business. Under the deferred prosecution agreement, UB=
S has
also agreed to expeditiously exit the business of providing banking service=
s to
United States clients with undeclared accounts. As part of the deferred
prosecution agreement, UBS has further agreed to pay $780 million in fines,
penalties, interest and restitution. Earlier today, the agreement was accep=
ted
in Ft. Lauderdale, Fla. by U.S. District Judge James I. Cohn.
A criminal information was unsealed today that charges UBS with conspiring =
to
defraud the United States by impeding the IRS. According to court documents=
, in
2000, after it purchased the brokerage firm Paine Webber, UBS voluntarily
entered into an agreement with the IRS that required UBS to report to the I=
RS
income and other identifying information for its United States clients who =
held
United States securities in a UBS account. Court documents allege that the
agreement also required UBS to withhold income taxes from United States cli=
ents
who directed investment activities in foreign securities from the United St=
ates.
The information further asserts that, in order to evade those new reporting
requirements, employees and managers within the cross-border business, with=
the
knowledge of certain UBS executives, helped United States taxpayers open ne=
w UBS
accounts in the names of nominees and/or sham entities. According to court
documents, the assets of the individual=92s accounts were then transferred =
to the
newly created accounts, as to which the U.S. taxpayer would not be identifi=
ed as
a beneficiary.
The information asserts that this device was used by UBS to justify evading=
its
reporting obligations and helped United States taxpayers to continue to con=
ceal
their identities and assets from the IRS.
The information also alleges that Swiss bankers routinely traveled to the U=
nited
States to market Swiss bank secrecy to United States clients interested in
attempting to evade United States income taxes. Court documents assert that=
, in
2004 alone, Swiss bankers allegedly traveled to the United States approxima=
tely
3,800 times to discuss their clients=92 Swiss bank accounts. The informatio=
n
further alleges that UBS managers and employees used encrypted laptops and =
other
counter-surveillance techniques to help prevent the detection of their mark=
eting
efforts and the identities and offshore assets of their U.S. clients. Accor=
ding
to the information, clients of the cross-border business in turn filed fals=
e tax
returns which omitted the income earned on their Swiss bank accounts and fa=
iled
to disclose the existence of those accounts to the IRS.
In light of the bank=92s willingness to acknowledge responsibility for its =
actions
and omissions, its cooperation and remedial actions to date, and its promis=
ed
continuing cooperation and remedial actions, the government will recommend
dismissal of the charge, provided the bank fully carries out its obligation=
s
under the agreement.
In November 2008, UBS executive Raoul Weil was indicted by a federal grand =
jury
in Fort Lauderdale and charged with conspiring to defraud the United States=
for
his alleged role in overseeing the United States cross-border business. The
district court recently declared him to be a fugitive.
In June 2008, former UBS private banker Bradley Birkenfeld pleaded guilty t=
o a
charge of conspiring to defraud the United States for similar conduct.
Birkenfeld is scheduled to be sentenced on May 1, 2009. Also, in June 2008,=
the
U.S. District Court in Miami authorized the Internal Revenue Service to ser=
ve
upon UBS a so-called "John Doe" summons seeking records that would identify
United States taxpayers with accounts at UBS in Switzerland who have electe=
d to
conceal the existence of their accounts from the IRS.
"Today=92s agreement is but one milestone in an ongoing law enforcement eff=
ort to
reassure hard-working and law-abiding taxpayers who pay their fair share of
taxes that those who don=92t will pay a heavy price," said John A. DiCicco,=
Acting
Assistant Attorney General of the Justice Department=92s Tax Division. "The=
veil
of secrecy has been pulled aside and we will continue to aggressively pursu=
e
those who shirk their federal tax obligations or assist others in doing so.=
"
"UBS executives knew that UBS=92s cross-border business violated the law," =
said R.
Alexander Acosta, U.S. Attorney for the Southern District of Florida. "They
refused to stop this activity, however, and in fact instructed their banker=
s to
grow the business. The reason was money -- the business was too profitable =
to
give up. This was not a mere compliance oversight, but rather a knowing cri=
me
motivated by greed and disrespect of the law."
Acting Assistant Attorney General DiCicco and U.S. Attorney Acosta commende=
d Tax
Division attorneys Kevin Downing and Michael Ben=92Ary, and Assistant U.S.
Attorney Jeffrey Neiman, along with special agents from the Internal Revenu=
e
Service who provided invaluable assistance in investigating this case.
More information about the Justice Department=92s Tax Division and its enfo=
rcement
efforts is available at
http://www.usdoj.gov/tax/.
###
09-136
Received on Sat Mar 02 2024 - 00:57:25 CST