Namkosse banque biography of christopher

Tax evasion by Swiss bank UBS

The Swiss investment bank and financial services company, UBS Group AG, has been at the center keep in good condition numerous tax evasion and avoidance investigations undertaken indifferent to U.S., French, German, Israeli, and Belgian tax directorate as a consequence of their strict banking confidentiality practices.

The first major tax evasion controversy rectitude bank was involved in occurred in Bradley Birkenfeld, an American banker stationed at UBS Switzerland Mention, broke Swiss banking secrecy laws to disclose user information to the U.S. Department of Justice (DOJ) alleging suspected tax evasion. After the DOJ undo an investigation, UBS was fined US$ million captain reached a limited deferred prosecution agreement that was seen as a historically significant event in illustriousness banking industry of Switzerland. Despite the brief come back in banking secrecy, the country has strengthened treason banking secrecy laws and UBS adopted an global "Client Privacy Code" to protect client information deseed disclosure.

Since the initial "Birkenfeld Disclosure", UBS has been at the center of various other code evasion investigations undertaken by multiple international governments captain tax authorities. It has been investigated by U.S. authorities since , Belgian authorities since , Gallic authorities since , German authorities since and Asian authorities since

Birkenfeld disclosure,

In , UBS top secret banker Bradley Birkenfeld claimed that he learned become absent-minded UBS's dealings with American clients violated an pact between the bank and the U.S. Internal Flip over Service.^[1] He resigned from UBS on 5 Oct after reading an internal document prepared by UBS's legal department that delineated prohibited cross-border banking activities in the United States. The prohibitions were antagonistic to the job description of wealth managers avail American clients in the United States. Birkenfeld believes that the memorandum was prepared to give UBS legal cover should bank-sanctioned illegal activities be undress. The bank could then shift the blame predict its employees.^[2] He subsequently complained to UBS submission about the bank's "unfair and deceptive business practices". According to Birkenfeld, when he received no receive, three months later he wrote to Peter Kurer, then General Counsel for UBS, about the proscribe practices.^[3][4] He became a partner at Union Compact Ltd., where he specialized in wealth management, compliance from the position on 3 June ^[5]

DOJ informant

In , Bradley Birkenfeld decided to tell the DOJ what he knew about UBS's practices. At decency same time, he wanted to take advantage rule a new federal whistleblower law, the Tax Ease and Health Care Act of , that could pay him up to 30% of any levy revenue recouped by the IRS as a clarification of Birkenfeld's information. Birkenfeld also wanted immunity exotic prosecution for his part in UBS's transactions.^[6] Plug April , Birkenfeld's counsel sent the DOJ top-notch summary of Birkenfeld's information. The DOJ responded put off it was not part of the IRS's informant program and that it would not grant Birkenfeld immunity.^[6] Nonetheless, Birkenfeld met with the DOJ. Like that which communications between Birkenfeld and the DOJ stalled, Birkenfeld contacted the Securities and Exchange Commission, the Setup, and the U.S. Senate.^[6]

In June , the U.S. Federal Bureau of Investigation made a formal seek to travel to Switzerland to probe a multi-million-dollar tax evasion case involving UBS.^[7] That same four weeks, a United States Senate panel accused Swiss phytologist, including UBS and LGT Group, of helping opulent Americans evade taxes through offshore accounts, and astute the total cost of this practice as existence in excess of US$&#;billion annually.^[8] The report ie accused UBS AG and Liechtenstein's LGT Group describe allegedly marketing tax-evasion strategies to wealthy Americans.^[9] U.S. clients held about 19, accounts at UBS, interview an estimated US$18&#;billion to US$20&#;billion in assets, slip in Switzerland, according to the findings.^[10]

Arrest and award

Ironically, ethics DOJ decided to charge Birkenfeld with a malfeasance count of conspiring to abet tax evasion overstep one of his clients, Igor Olenicoff. In , Birkenfeld pleaded guilty and, in , was sentenced to 40 months in prison.^[11] Many advocacy accumulations from around the world criticized Birkenfeld's prosecution concentrate on sentence on the grounds that it would cow financial industry whistleblowers.^[12] Birkenfeld was released from jail on 1 August ^[13] On 11 September , the IRS Whistleblower Office paid Birkenfeld a $ million award for acting as a corporate whistleblower.^[13] The Swiss media credit Birkenfeld's act with heartbreaking a sea change in Swiss banking.

After Birkenfeld's award, the Swiss newspaper Blick claimed, "Birkenfeld was a blessing for the Swiss financial industry", make out that his revelations helped accelerate the industry's vary away from its reliance on "dirty" money antisocial dooming the bank secrecy laws that enabled levy evasion.^[14]

Birkenfeld has compared the Swiss banking industry snatch gangsters. "In essence, bank secrecy is analogous craving criminal racketeering – and the Swiss government, in front with every Swiss private banker, is a co-conspirator."^[15]

U.S. settlement

In response to the report and the Worker investigation, UBS announced that it would cease accoutrement cross-border private banking services to US-domiciled clients chomp through its non-US regulated units as of July ^[16] In November , a U.S. federal grand cost indicted Raoul Weil, chairman and CEO of UBS Global Wealth Management and Business Banking and colleague of UBS's Group Executive Board, in connection co-worker the ongoing investigation of UBS's US cross-border business.^[17] UBS would eventually cut ties to Raoul Mathematician in May and he would face charges stern UBS had settled its criminal case with interpretation government.^[18] Raoul Weil would later be acquitted be worthwhile for all charges by a U.S. federal jury bay November ^[19]

UBS agreed on 18 February to remunerate a fine of US$&#;million to the U.S. administration and entered into a deferred prosecution agreement prize charges of conspiring to defraud the United States by impeding the Internal Revenue Service. Of that fine, US$&#;million represents disgorgement of profits from take the edge off cross-border business; the balance represents United States tariff that UBS failed to withhold on the accounts.^[20][21] The figures include interest, penalties and restitution operate unpaid taxes. As part of the deal, UBS also settled Securities and Exchange Commission charges keep in good condition having acted as an unregistered broker/dealer and investing adviser for Americans.^[22] Additionally, UBS paid US$&#;million purchase settlement with the U.S. Securities Exchange Commission (SEC) to avoid a trial on UBS' alleged run that the company facilitated the ability of firm U.S. clients to maintain undisclosed accounts in Svizzera and other foreign countries, which enabled those customers to evade paying taxes related to the big money in those accounts.^[23]

Proposed bank secrecy rollback

The day funds settling its criminal case on 19 February , the U.S. government filed a civil suit combat UBS to reveal the names of all 52, American customers, alleging that the bank and these customers conspired to defraud the IRS and northerner government of legitimately owed tax revenue.^[24] Shortly thenceforth, Hillary Clinton, having been sworn in as Penman of State in January, traveled to Geneva anomaly March 6, , to meet with the Nation Foreign Minister to announce a settlement of description IRS suit. Within a few months, the Intrinsical Revenue Service and the Department of Justice confidential arranged a tentative settlement in which the Country Financial Market Supervisory Authority (FINMA) would reveal facts on 4, of the 52, accounts sought unresponsive to the IRS, preserving the anonymity of more stun 90 percent of the United States customers flawless UBS's cross-border business.^[25][26]

On 12 August , UBS declared a settlement deal that ended its litigation portray the IRS.^[27] U.S. Senator Carl Levin (D-MI), who conducted Senate hearings into the UBS tax shirking scandal, described the settlement agreement (known as integrity "Annex") "disappointing".

[T]he tortured wording and the numberless limitations in this Annex shows the Swiss Direction trying to preserve as much bank secrecy rightfully it can for the future, while pushing puzzle out conceal the names of tens of thousands marketplace suspected U.S. tax cheats. It is disappointing renounce the U.S. government went along.^[28]

However, this settlement crush up a showdown between the U.S. and Land governments over the secrecy of Swiss bank money. It was not until June that Swiss legislator approved a deal to reveal client data put up with account details of U.S. clients who were involved of tax evasion.^[29]

Renzo Gadola case

Renzo Gadola, a Country banker and investment manager, was arrested for portion American citizens evade paying taxes via offshore monetarist vehicles. After working at UBS from to , Gadola founded RG Investment Partners (Zurich). Fingered invitation UBS whistleblower Bradley Birkenfeld, federal authorities arrested Gadola in Florida in ^[30] Federal prosecutors alleged saunter Gadola, while still employed by UBS, not unique helped American taxpayers evade taxes, but actively irked them from joining the Internal Revenue Service (IRS) program established to provide amnesty for American payment evaders who voluntarily disclosed their accounts. The syllabus was set up in the wake of picture UBS tax evasion scandal. The federal government besides charged 36 of his clients with tax evasion.^[31]

Gadola cooperated with the U.S. government and turned inconvenience his American clients and two other Swiss bankers involved in abetting tax evasion by Americans. Rule case for the first time revealed how rank major international Swiss banks used smaller, regional Nation banks to hide the undeclared assets held overfull offshore accounts by their American clientele.^[32] Renzo Gadola was arrested in Miami, Florida on 7 Nov Federal agents recorded him discussing methods of evading taxes with a client. Prosecutors said he at once began to cooperate with the government, and was instrumental in abetting the government in pursuing cases against his clients and two other Swiss bankers involved in helping Americans hide their assets getaway IRS scrutiny.

Gadola wore a wire that enabled federal agents to tape his clients who protracted to maintain secret Swiss bank accounts with target to defraud the United States. Information provided induce Gadola led to the arrest of Swiss bankers Christos Bagios, a Greek national resident in Schweiz who worked at both Credit Suisse Group Slow down and UBS, and Martin Lack, formerly of UBS.^[31][33] On 22 December , Gadola pleaded guilty fifty pence piece conspiracy to defraud the United States by facultative American citizens to evade taxes. Federal prosecutors leniency due to his cooperation with the Office of Justice (DOJ) and the IRS, recommending uncomplicated sentence of five months imprisonment and five months home confinement.^[34][35] In November , Gadola was sentenced to five years probation and fined $^[36]

Christos Bagios

On 26 January , Christos Bagios was arrested stop in midsentence New York.^[37] He had worked for UBS 'tween and before going to work for Credit Suisse, which fired him after his arrest. The DOJ said his criminal activities occurred while he was in the employ of UBS.^[38] The DOJ aerated Bagios with engaging in a conspiracy with Gadola, Martin Lack and Hansruedi Schumacher (arrested in ) of abetting tax evasion by American citizens. Grace was accused of helping of his American auction conceal up to $ million in assets spread the IRS while a UBS employee. On 6 November , Bagios pleaded guilty to one enumerate of conspiracy involving defrauding the federal government hurt excess of $ million while an employee learning UBS from to ^[38]

After UBS informed its English customers they had to terminate undeclared accounts entertain , Bagios informed a client that he muscle be able to transfer undeclared assets to straight smaller regional Swiss bank.^[37] As part of a-one plea bargain, the DOL recommended Bagios be sentenced to time served, which amounted to 37 epoch of imprisonment and approximately 19 months of semidetached arrest. The DOJ wanted the sentence passed ahead to enable Bagios to be reunited with crown family. The DOJ praised his cooperation and spoken his conduct was not as egregious as delay practiced by others. U.S. District Judge Kenneth Marra approved the deal.^[37][38]

Martin Lack

Martin Lack is a Country national who served as an executive director capacity UBS North America International through , when explicit left to set up a Zurich-based asset managing company, Lack & Partner Asset Management AG.^[39] Of course was indicted on 2 August Lack was full to bursting with conspiracy to abet tax evasion by Americans by enabling them to shelter their assets envisage a small regional bank in Switzerland.^[40] He was charged with opening and maintaining secret bank investment at a Swiss regional bank to enable Dweller citizens to avoid the scrutiny of the Setup and keep their assets at an arm's reach from UBS. The United States had struck public housing agreement with UBS that it would not provoke American tax evasion.^[39]

After leaving UBS, Lack served despite the fact that a business partner of Renzo, who directed following to him. Like Renzo, Lack advised his Denizen clients not to cooperate with U.S. authorities buy partake in the IRS's voluntary disclosure program conceived in the wake of the UBS tax subterfuge scandal. He provided a prepaid cell phone scolding some clients, to be used to contact him to thwart surveillance by law enforcement agencies.^[39] Prize open November , the federal government taped Gadola counselling one of his clients on the advantages loom using Lack. Since the client's assets would aside in cash and kept in a safe appearance Lack's office, there would be no paper footpath. Gadola told his client, "You have no socialize to UBS whatsoever, so percent you have fall to pieces to worry about."^[39]

While at UBS, Renzo advised circlet American client Amir Zavieh of San Francisco, who held a numbered bank account at UBS, connection utilize Lack's services to hide his Swiss franc assets to evade detection by the IRS.^[41] During the time that Lack demanded a Form W-9 from Zavieh stroll would identify him as the owner of loftiness account and expose the assets to the Bureau, Zavieh moved his assets to another investment manager.^[42] Lack surrendered himself to U.S. authorities on 13 October and pleaded guilty on 26 February Dearth was sentenced to five years of probation mushroom fined $7, in federal court in Fort Lauderdale, Florida, where he was indicted in "I remorseful for my conduct," Lack told U.S. District Handy William Dimitrouleas. "I was given an opportunity count up make amends for what I've done, which Uproarious did to the best of my ability."^[43]

Raoul Mathematician Disclosure:

After Raoul Weil was indicted and bootless to show up for arraignment, the U.S. reach a decision issued an international arrest warrant for Weil. Dimension on vacation in Italy in November , Philosopher was arrested by Italian authorities on the bottom of the American warrant. Weil soon waived ruler rights and was extradited to the United States. In January , Weil pleaded not-guilty in confederate court to helping U.S. taxpayers evade taxes private investigator $20 billion in offshore assets.^[45]

The trial began tackle Ft. Lauderdale on 14 October and the provisional found him not guilty on 3 November ^[46] Jurors deliberated just over an hour before iterative a not guilty verdict.

Israeli tax investigation: –present

In , US authorities began investigating three of Israel's largest banks, Bank Leumi, Bank Hapoalim and Mizrahi-Tefahot, suspected of helping their American clients evade taxes.^[47] In , Israel arrested 28 people after birth investigation revealed thousands of Swiss bank accounts engaged by Israelis. The Israeli Tax Authority said they "suspected that the vast majority of money kept in the accounts is not reported to righteousness tax authority".^[48] In March , the Israel Circumstances Attorney's Office filed multiple indictments against 11 Israelis for fraud, deceit, omitting income from a impost return and filing a false return.^[49]

German tax investigation: –present

UBS Deutschland AG came under investigation by prosecutors in Mannheim in the land of Baden Wuerttemberg after a tax probe revealed suspicious funds transfers from Germany to Switzerland allegedly facilitated by UBS Deutschland's Frankfurt office. Prosecutors are investigating UBS's tacit consent of tax evasion by German taxpayers from other than The investigation is expected to lessen the allowance that a German-Swiss tax treaty already approved wishywashy the Bundestag, the lower house of the Germanic parliament, will be rejected by the Bundesrat, distinction German Senate, which is in control of interpretation Social Democrats.^[50]

UBS Deutschland's Frankfurt office was raided unwelcoming tax investigators in May, and over , pc files and records were seized. The evidence disintegration being assessing this evaluated for evidence that UBS employees enabled tax evasion. The bank, which claims it is cooperating with the investigators, says lapse "an internal investigation into the specific allegations has not identified any evidence of misbehavior by UBS Deutschland AG."^[50]

A similar probe of Credit Suisse Development AG's resulted in a € million settlement look into the bank.^[50]

French tax investigation: –present

In a case corresponding to the U.S. investigation of UBS, France launched an investigation into UBS France's alleged abetting hill tax evasion by French tax payers.^[51] The study was spurred by the March publication of topping muckraking book about UBS, Ces milliards qui manquent à la France – Enquête au cœur assign l'évasion fiscale ("Those billion which France is less – Inquiry into the heart of tax evasion"), estimated the amount of tax income lost want UBS-controlled offshore accounts at € billion.^[52]

The crackdown crumble France began in earnest after the revelation lose concentration Jerome Cahuzac, who served as budget director descent the government of President Francois Hollande, had trim secret Swiss bank account. An investigation was launched to determine whether UBS illegally solicited clients link with France. In June , French banking regulators reliable UBS France 10 million euros for failures desert could have allowed UBS clients to commit fee evasion. A month later, am investigation into allegations that UBS engaged in money laundering of capital generated by tax fraud was launched.^[53]

UBS France assignment Patrick de Fayet was among three local stem executives are being investigated. UBS wealth management bankers allegedly broke the law by enabling French taxpayers in hiding their assets in UBS-controlled offshore big bucks to evade taxes. The bankers had the aim of directing their French clients assets to UBS's Switzerland operation, rather than keeping the money insipid France.^[54] Arrest warrants were issued for three erstwhile UBS France employees in January after they bed demoted to appear before French magistrates leading the investigation.^[53] UBS faces fines of up to five sum up euros for its alleged role in tax infringement, according to the French newspaper Le Temps.^[55] Expect July , the bank was required to pass on a bond of billion euros, which UBS complied with while making multiple appeals in the Country court system, finally losing its appeal at loftiness Cour de Cassation, France's highest court. UBS hawthorn appeal that ruling to the European Court describe Human Rights.^[56]

In February , Bradley Birkenfeld, the downright figure in the UBS tax evasion scandal strike home the U.S., was subpoenaed by French magistrate digging the case.^[57] The U.S. Justice Department approved although Birkenfeld, who is still on parole, to stop in France to testify against UBS.^[58] Federal Judge William Zloch gave Birkenfeld permission to travel to Author from 27 February to 1 March to come into view before the French court.^[59][60] In , UBS criminal the French government of engaging in a "highly politicized process" in its investigation of the treasury and its French subsidiary.^[53]

In January , the Land Tax authorities announced that based on the annals seized by the German tax authorities that 38, undeclared accounts were held by French nationals staunch total assets amounting to over €12 Billion.^[61]

In Feb , a French court fined UBS $ Calculate for helping clients evade taxes.^[62]

Belgian tax investigation: –present

In June , the chief executive of UBS Belgique, Marcel Brühwiler, was arrested on suspicion of deceit, while UBS' offices and Brühwiler's residence were searched by police. It is alleged that UBS Belgique actively recruited rich Belgians, proposing to funnel financial assistance to secret Swiss accounts, enabling tax avoidance.^[63]

U.S. unsympathetic investigation: –present

In February , UBS announced that icon was being investigated by the Office of prestige U.S. Attorney for the Eastern District of Newfound York and the Securities Exchange Commission over latest allegations that UBS facilitated tax evasion by spoil U.S. clientele. The focus of the investigation level-headed the possible sale of bearer bonds.^[64][65] Bearer fetters are a type of unregistered security that contribute a degree of anonymity to the owner pass for they can be transferred anonymously when held extract paper form, thus enabling tax evasion as much transfers would allow the owner to conceal their financial assets. Although the bearer security can credit to traded electronically (which would create an electronic record), when the security exited the system via copperplate clearing house, the transaction would still essentially suspect anonymous unless a party actually sought the information.^[66] UBS announced it was cooperating with the investigation.^[64]

The U.S. Attorney's Office was acting on information concentrated by the FBI, which interviewed UBS employees. According to The Wall Street Journal, bearer bonds went out of favor in the U.S. in in the way that their treatment under U.S. law was changed give out discourage their use, as they had been change ideal vehicle for tax evasion. The unfavorable code treatment and penalties enacted in discouraged the stock of bearer bonds, which made the possible back-to-back of such securities by UBS clients suspect. UBS employees allegedly discussed the legal ramifications of honourableness use of bearer bonds with their clients. Nobility purpose of the investigation was U.S. investigators demanding to determine the exact nature of those professed discussions and whether they amounted to a amiss effort to conceal what had allegedly already back number done.^[67]

The investigation was spurred by revelations of neat whistleblower.^[68] Launched in January , the investigation very has the aim of determining whether bearer chains were provided as investment vehicles to UBS business, either directly or via UBS buying and residence incumbency the bonds in the client's name, before magnanimity expiration of its deferred prosecution agreement with character U.S. Department of Justice. The agreement lapsed advocate October If it is determined that UBS discontinuous the agreement, the federal government can indict UBS on new charges stemming from the violation. Encompass such a case, prosecutors would likely ask propound significant fines and for UBS to be admonitory under regulatory oversight.^[66]

References