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Two ex-Julius Baer bankers plead not guilty in U.S. tax case
February 2, 2016 / 8:46 PM / 2 years ago

Two ex-Julius Baer bankers plead not guilty in U.S. tax case

NEW YORK (Reuters) - Two former Julius Baer private bankers pleaded not guilty on Tuesday to U.S. charges they conspired to help U.S. taxpayers hide more than $600 million in offshore accounts and evade paying taxes.

Daniela Casadei and Fabio Frazzetto, former client advisers with the Swiss bank, entered their pleas in Manhattan federal court after voluntarily agreeing to face the charges. Both are Swiss citizens normally beyond the reach of U.S. extradition.

Their appearance in court came after Julius Baer in December said it had reached an agreement in principle with U.S. authorities to pay $547.25 million to settle an investigation into allegations it helped wealthy American clients evade taxes.

It was unclear if their decision to voluntarily arrive in the United States was connected to the settlement, which Switzerland’s third largest listed bank had said it expected in the first quarter of 2016.

A spokeswoman for Manhattan U.S. Attorney Preet Bharara noted only that another hearing in their case was scheduled for Thursday. She declined further comment.

Casadei, 52, and Frazzetto, 42, were each released on a $1 million bond secured by $250,000 cash.

In light of their agreement to voluntarily appear in court to face charges pending since 2011, both will permitted to return to Switzerland, which does not extradite its own citizens.

“This is an unusual case,” Assistant U.S. Attorney Sarah Paul said in court in explaining the rationale for the bail package.

Lawyers for Casadei and Frazzetto did not respond to requests for comment after the hearing, nor did Julius Baer.

The case is one of several spilling out of a broad crackdown by the United States on offshore tax evasion by Americans.

Casadei and Frazzetto were indicted 2011. Prosecutors said they conspired with various U.S. taxpayers and others to ensure their clients could hide their Swiss bank accounts and the income generated in them from the Internal Revenue Service.

As part of the scheme, Casadei and Frazzetto opened and managed undeclared accounts in fictional names like “Hydrangea” and “Red Rubin” or in the name of foreign relatives or sham corporate entities, prosecutors said.

U.S. clients were not sent mail about the accounts in the United States, as they insisted clients instead travel to Switzerland to conduct business related to them, prosecutors said.

In total, the maximum value of the assets in the undeclared accounts belonging to their clients was greater than $600 million, prosecutors said.

The case is U.S. v. Casadei, U.S. District Court, Southern District of New York, No. 11-cr-00866.

Reporting by Nate Raymond; Editing by Lisa Shumaker, Bernard Orr

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