Florida UBS client pleads guilty to tax fraud

MIAMI (Reuters) - A Florida accountant charged with tax evasion in one of the first U.S. prosecutions of wealthy U.S. clients of Swiss bank UBS AG> pleaded guilty on Thursday to a single count of tax fraud, authorities said.

The Department of Justice said Steven Michael Rubinstein, who worked for a company in the yacht-building business, pleaded guilty to filing a false tax return for 2004 and failing to disclose the account he controlled, and moved large sums of money through, at UBS, Switzerland's largest bank.

Sentencing has been set for September 30. Rubinstein faces a maximum sentence of three years in prison and a maximum fine of $250,000 or twice the amount of pecuniary gain to the defendant or loss to the Internal Revenue Service (IRS).

Rubinstein remains free on $12 million bail.

U.S. authorities have said there will be other tax evasion prosecutions against American clients of UBS as they wage a legal battle with the bank to try to force it to give up the names of tens of thousands of Americans suspected of cheating the U.S. government by concealing accounts abroad.

The Swiss government has been fighting to preserve the country's long-standing bank secrecy laws, in the face of international pressure for more tax haven transparency.

In February, UBS acknowledged responsibility for helping U.S. clients conceal assets from the U.S. government and agreed to pay a $780 million fine and to identify some U.S. clients. U.S. officials say Rubinstein's prosecution stemmed from this.

"Today's guilty plea resolves the first prosecution of a UBS client based upon records received from UBS pursuant to the historic deferred prosecution agreement executed earlier this year," Acting U.S. Attorney Jeffrey H. Sloman said.

"More prosecutions are expected to follow, as we continue to hold accountable those who conceal money and assets in an effort to avoid their income tax obligations," he added.

Fearing they might obtain only a limited number of names, U.S. authorities are suing UBS to force it to disclose the identities of 52,000 U.S. clients suspected of using the Swiss bank to evade taxes.

Switzerland and the United States announced last week they had reached agreement on a double taxation treaty, although few details have emerged.

Some analysts said the tax treaty agreement increased the chances of a deal in the UBS case, but said the United States was unlikely to settle early to keep pressure on American clients of UBS to come forward and declare themselves under a voluntary disclosure program.

The U.S. Justice Department said this week it was not planning to drop its lawsuit seeking to force UBS to disclose thousands of its U.S. customers with secret accounts.

The department was responding to a report in The New York Times saying the case might be dropped.

(Writing by Tom Brown and Pascal Fletcher, editing by Matthew Lewis)