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Wednesday, November 20, 2019

Three Swiss bankers indicted for $1.2B conspiracy

By Michael P. Tremoglie | Jan 4, 2012

NEW YORK (Legal Newsline) - The U.S. Attorney for the Southern District of New York has indicted three Swiss bankers for conspiring to hide more than $1.2 billion in assets from the IRS.

These assets were hidden in undeclared accounts of U.S. taxpayers at the bank, identified only as "Swiss Bank A," where the three -- Michael Berlinka, 41, Urs Frei, 51, and Roger Keller ,47, -- worked as client advisers. All three are Swiss residents.

According to the Jan. 3 indictment, the three men allegedly conspired with American taxpayers and others to hide from the IRS both the existence of certain Swiss bank accounts as well as the income they generated.

The three apparently opened and serviced dozens of undeclared accounts for U.S. taxpayers in 2008 and 2009. This was part of an effort to acquire business lost by two other international Swiss banks, one identified as UBS AG ("UBS") and the other identified as "Swiss Bank B."

News reports that the IRS was investigating UBS and "B" for assisting Americans to evade taxes forced those banks to stop opening undeclared accounts for Americans.

Berlinka, Frei and Keller acquired the assets of tax evading Americans by allegedly telling them that their undeclared accounts at Swiss Bank A would not be disclosed to the United States authorities because Swiss Bank A historically maintained confidentiality with their clients.

The defendants and other client advisers at Swiss Bank A also told American customers that because the bank did not have offices outside of Switzerland it would be less exposed to American law enforcement pressure. Members of Swiss Bank A's senior management also participated in some of these solicitations.

Berlinka, Frei, Keller and/or other client advisers allegedly opened and serviced undeclared accounts for U.S. taxpayer-clients in the names of sham corporations and foundations formed under the laws of Liechtenstein, Panama, Hong Kong, and other jurisdictions for the purpose of concealing the identities of the U.S. taxpayer-clients from the IRS.

They received and retained documents that falsely declared that the sham entities were the beneficial owners of certain accounts, when in fact the accounts were owned by U.S. taxpayers. They permitted clients to open and maintain undeclared accounts at Swiss Bank A using code names and numbers to minimize references. They ensured that account statements and other mail for American customers were not mailed to them in the United States.

U.S. taxpayers are required to report on their federal income tax returns foreign bank accounts in excess of $10,000 at any time during a given year, as well as any income it earns. By 2010, the collective maximum value of the assets in undeclared accounts beneficially owned by U.S. taxpayer-clients of the three and other Swiss Bank A advisers was more than $1.2 billion -- many of which were greater than $10,000 in any one year.

The accused could potentially be sentenced to a maximum term of five years in prison, a maximum term of three years of supervised release, and a fine of the greatest of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross pecuniary loss to the victims.

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U.S. Attorney for the Southern District of New York