Alleged mastermind of UBS tax evasion scheme faces trial
(Reuters) – Former UBS bank executive Raoul Weil was the mastermind of the Swiss bank’s illegal offshore operations that helped thousands of Americans evade taxes, prosecutors said at the start of his federal trial on Tuesday.
Weil, 54, was the third-highest ranked executive at the Zurich-based wealth management firm and was charged by U.S. authorities in 2008 of concealing up to $20 billion in U.S. taxpayers’ assets in secret offshore accounts.
“You’ll hear evidence that problems with this U.S. business were brought to Weil’s attention again, and again, and again, year after year,” Mark Daly of the Justice Department’s tax division told jurors at the trial in South Florida. “He had the power to shut down this business.”
If convicted, Weil faces up to five years in prison for conspiracy to commit tax fraud.
Weil’s attorneys said the offshore private banking business was only a tiny fraction of his responsibilities overseeing UBS wealth management’s of more than $2 trillion in assets.
This “is a case about a small group of Swiss bankers who … decided for their own reasons and for their own personal gain to violate banks rules and to violate the laws,” said Aaron Marcu, an attorney with New York City-based Freshfields Bruckhaus Deringer.
Weil was arrested in October 2013 while on vacation with his wife at an upscale hotel in the northern Italian city of Bologna. [ID:nL6N0JS38C] He pleaded not guilty last year after being extradited to the United States.
The trial is expected to last about four weeks, according to Judge James I. Cohn. Wearing a suit, Weil looked upbeat in a federal courtroom in Fort Lauderdale, where his wife, members of the European media and international lawyers also were in attendance.
The United States in recent years has stepped up its pursuit of Swiss banks for aiding tax evasion and has increasingly pressured individual bankers.
Authorities are also examining whether 14 Swiss banks had roles in helping potentially tens of thousands of Americans avoid paying billions of dollars in taxes.
Daly laid out alleged tactics bankers were ordered to use, including keeping bank statements free of account holders’ information, or the bank’s name. UBS bankers were also given computers, Daly said, with secret, second hard drives holding account confirmation that could be erased in an instant with a password.
To disguise any links with the banks, the bankers met clients clandestinely at major events, such as tennis tournaments and the annual Art Basel fair in Miami Beach, he said.
Marcu slammed the credibility of government witnesses, including the bank’s former top private banker for the Americas, Martin Liechti, who was ousted from UBS in 2009 after providing evidence to the United States after being detained in Florida in 2009.
“They cheated, the instructed their underlings to cheat, to help Americans to set up phony corporations to help them cheat on their taxes, they broke the law … and then they hid,” Marcu said. “They had no interest in sharing with Mr. Weil the fact that they were violating the law.”