MIAMI–(ENEWSPF)–August 21, 2009. Former UBS banker, Bradley Birkenfeld of Weymouth, Mass., has been sentenced to 40 months incarceration by Judge William J. Zloch in Fort Lauderdale, Fla. On June 19, 2008, Birkenfeld pleaded guilty to conspiring to defraud the United States, the Justice Department announced today.
According to court documents and statements made in court today, Birkenfeld worked as a private banker in Geneva, Switzerland, for UBS AG, one of the country’s largest banks. While at UBS, Birkenfeld assisted an American billionaire real estate developer evade paying $7.2 million in taxes by assisting the developer conceal $200 million of assets hidden offshore in Switzerland and Liechtenstein. While at UBS, Birkenfeld routinely traveled to and had contacts within the United States in an effort to assist wealthy Americans conceal their ownership in assets held offshore and therefore evade the payment of taxes on the income generated on the money hidden offshore.
In order to assist wealthy Americans who concealed assets at UBS in Switzerland, Birkenfeld admitted that he and others advised U.S. clients to place cash and valuables in Swiss safety deposit boxes; purchase jewels, artwork and luxury items using the funds in their Swiss bank account while overseas; misrepresent the receipt of funds from the Swiss bank account in the United States as loans from the Swiss bank; destroy all off-shore banking records existing in the United States; utilize Swiss bank credit cards that they claimed could not be discovered by United States authorities; and file false U.S. individual income tax returns that omitted income earned by their clients and fraudulently misrepresented that their clients did not have an interest in and signature authority over accounts held offshore.
In February 2009, UBS entered into a deferred prosecution agreement and the bank admitted to helping U.S. taxpayers hide accounts from the Internal Revenue Service (IRS). As part of their agreement, UBS provided the United States government with the identities of, and account information for, certain United States customers of UBS’s cross-border business. The deferred prosecution agreement paragraph 13 stated that the United States would be seeking enforcement of a civil “John Doe” summons seeking records for United States persons who maintained accounts with UBS in Switzerland. On Aug. 19, 2009, the civil matter was resolved and UBS agreed to produce the identities and account information of 4,450 additional UBS customers who are believed to have violated United States law.
“To those taxpayers who have illegally hidden their income in foreign bank accounts and to those who have illegally helped clients hide income and assets, today’s sentencing serves as notice: come in and completely come clean,” said John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division. “A failure or delay in doing so until after the Government has discovered the wrongdoing, even if there is then cooperation, has serious consequences.”
“Those who have stashed money offshore should not take comfort in the fact that the UBS investigation seems to have reached criminal and civil resolutions,” said Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida. “New leads and additional evidence are being uncovered each day. We are committed to pursuing these new leads and to developing additional cases against those who assist Americans evade their income tax obligations.”
Acting Assistant Attorney General John DiCicco and Acting U.S. Attorney Jeffrey H. Sloman commended the investigative efforts of the IRS agents involved in this case. The prosecution is being handled by Senior Litigation Counsel Kevin M. Downing and Trial Attorney Michael P. Ben’Ary of the Tax Division, and Assistant U.S. Attorney Jeffrey A. Neiman.
“Mr. Birkenfeld admitted his role in advising wealthy U.S. clients to take various actions to conceal their assets at UBS in Switzerland from the US Government,” said Eileen Mayer, Chief, IRS Criminal Investigation. “Today, he is paying the price for that role. Clients as well as promoters of international tax fraud are under the watchful scrutiny of the IRS. For anyone with hidden offshore assets, the IRS wants to send a clear message. There is still time – although the clock is ticking – to come in and get right with the government.”
United States citizens who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III of their individual income tax return.
Additionally, American citizens must file a Report of Foreign Bank and Financial Accounts (FBAR) with the U.S. Treasury, disclosing any financial account in a foreign country with assets in excess of $10,000 for which they have a financial interest in or signature authority, or other authority over.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.
A copy of this press release may be found on the Web site of the U.S. Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the U.S. District Court for the Southern District of Florida at www.flsd.uscourts.gov or http://pacer.flsd.uscourts.gov.