December 7, 2011 / 5:26 PM / 6 years ago

U.S. indicts client of UBS, cantonal bank in tax case

(Reuters) - U.S. authorities have indicted another U.S. client of Swiss banking giant UBS AG in a case that sheds new light on the role of a major Swiss cantonal bank in enabling tax evasion by Americans.

Amir Zavieh, a naturalized U.S. citizen born in Iran, was charged late Tuesday with fraud and conspiracy by federal prosecutors in Fort Lauderdale, Florida.

The charges against Zavieh, a San Francisco resident who also goes by the first name Allen, refer to his accounts at UBS and at "a cantonal bank wholly owned by Basel City Canton." That bank is Basler Kantonalbank, according to public records and to persons briefed on the matter.

A Justice Department statement said Zavieh lied to U.S. investigators and "fabricated a false story about the ownership of the assets in the secret Swiss accounts at UBS and Cantonal Bank in order to conceal the defendant's ownership and control of assets and income" from the U.S. Internal Revenue Service.

The statement said Zavieh "made false statements to federal law enforcement agents regarding his ownership and control of the secret Swiss accounts."

The charges come amid a broad crackdown on tax evasion by the wealthy, with the United States and European governments, faced with huge budget deficits, seeking new revenue sources.

U.S. authorities - suspecting that tens of thousands of Americans are using Swiss banks to avoid paying billions of dollars in taxes - are investigating scores of Swiss banks and international banks with Swiss operations.

The investigations, an outgrowth of scrutiny of UBS, are focused on Credit Suisse AG, HSBC Holdings Plc and Basler Kantonalbank, among others.

In 2009, UBS paid $780 million to settle Justice Department criminal charges that the bank helped thousands of U.S. clients hide $20 billion in their accounts.

Swiss authorities want a global civil settlement with U.S. authorities in which the entire Swiss banking industry would pay a fine and shutter their undisclosed private banking services for Americans.

U.S. authorities, with civil and criminal probes under way, say at least some banks under criminal investigation are unlikely to escape more serious outcomes, including, possibly, indictments or deferred-prosecution agreements.

ZAVIEH CASE HIGHLIGHTS GADOLA

The Zavieh indictment underscores cooperation provided to U.S. authorities by Renzo Gadola, a former senior UBS private banker. For a number of years, he handled Zavieh's account.

Gadola, who worked at UBS from 1995 to 2008, last month received five months' probation from a Florida federal judge after being charged with conspiracy. Gadola has cooperated extensively with U.S. authorities conducting a wide-ranging criminal investigation of scores of Swiss banks.

His role is significant because he disclosed to federal prosecutors for the first time the role of Swiss cantonal banks, including Basler Kantonalbank (BKB), in helping Americans evade U.S. taxes. His cooperation continues as part of his probation.

According to court papers, Gadola was Zavieh's private banker from around 1999 to around 2004 for Zavieh's UBS account. Around 2009, Gadola left UBS to form RG Investment Partner AG in Zurich, sharing office space with Martin Lack, another former senior UBS private banker.

Lack, who was indicted in August, was executive director of UBS's North American international business, which included the cross-border banking business, from the early 1990s to around 2003. He is now a fugitive from justice.

Lack, who left UBS in 2003 and soon opened Lack & Partner Asset Management AG in Zurich, managed Zavieh's account at BKB from January 2009 to June 2010, court papers showed.

The Zavieh indictment also refers to three unindicted co-conspirators. The first is a UBS banker, identified by the initials B.M., who serviced Zavieh's UBS account from 2004 to 2008. B.M. worked out of Zurich and supervised a group of Zurich private bankers who served wealthy U.S. clients on the West Coast. The second is a Swiss cantonal banker referred to by the initials S.L. That person is Stefano Longhi, according to persons briefed on the matter.

The third is a Swiss financial adviser referred to as M.B., who worked at an independent asset management company and managed Zavieh's BKB account from June 2010 to the present, according to court papers.

Michael Buess, a spokesman for Basler Kantonalbank, was not immediately available for comment on Wednesday.

Reporting by Lynnley Browning in Fairfield, Conn., Editing by Kevin Drawbaugh and Matthew Lewis

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