* Bagios pleads not guilty but sets plea-change hearing
* Former banker's case part of wide-ranging U.S. probe
By Lynnley Browning and Kevin Gray
Oct 17 A former Swiss banker accused of helping
rich Americans dodge taxes may be cooperating with a broad U.S.
government investigation of Swiss banks for providing tax
evasion services, lawyers said on Wednesday.
Speculation that Christos Bagios is working with the United
States arose after the ex-employee of Swiss banks Credit Suisse
AG and UBS AG arranged a change-of-plea
hearing following his pleading not-guilty in a U.S. federal
court to new charges of aiding tax evasion.
Bagios is a central figure in the probe by the U.S.
Department of Justice into offshore tax evasion services sold by
Swiss and Swiss-style banks.
Some lawyers said he is likely preparing to plead guilty as
part of a cooperation deal with the DOJ, a move that could pile
pressure on Swiss banks targeted by the investigation.
"The fact that he has waived his right to indictment means
it is very likely he will change his plea" to guilty next week,
said Lawrence Brown, a tax lawyer in Fort Worth, Texas, with
offshore clients. Brown added that the move would help the
Robert Katzberg, a white-collar criminal defense lawyer in
New York with foreign bank clients, said that "from all
indications, it appears as though Bagios is cooperating with the
Katzberg added "if that is the case, it will push Credit
Suisse further toward having to deal with the U.S. government."
Bagios, a Greek citizen and Swiss resident, was a senior
private banker at Credit Suisse at the time of his arrest by
U.S. authorities in January 2011.
A month later, U.S. authorities filed charges against him,
accusing him of conspiracy and fraud in connection with
allegedly helping 150 Americans hide up to $500 million from the
Internal Revenue Service while he worked at UBS from 1999 to
Authorities fleshed out their allegations against Bagios on
Tuesday in new charges that effectively override the earlier,
2011 charges, and that shortened the time covered at UBS.
Bagios pleaded not guilty on Wednesday to the new charges
before Judge Barry Seltzer of Federal District Court in Fort
Lauderdale, Florida. Court papers showed Bagios is scheduled for
a change-of-plea hearing on Oct. 26.
Jack Grone, a spokesman for Credit Suisse in New York,
declined to comment.
Karina Byrne, a spokeswoman for UBS in New York, was not
immediately available for comment, according to an associate.
BAGIOS TOLD CLIENTS TO "WASH" ASSETS
Credit Suisse, Switzerland's second-largest bank, disclosed
in July 2011 that it was being investigated by the Justice
Department. The investigation swelled after UBS, Switzerland's
largest bank, paid $780 million and entered into a
deferred-prosecution agreement, now ended, with U.S. authorities
Eleven banks are under investigation, and dozens of Swiss
bankers and American clients have been indicted in recent years.
The new charges against Bagios assert that he told one U.S.
client to sign UBS documents falsely declaring that the client
was a Malaysian national, not a U.S. citizen.
Bagios and his co-conspirators, court papers alleged, also
told some UBS clients wishing to sneak hidden money back into
the United States that they needed to "wash" their undisclosed
assets back into the banking system, by transferring small,
undetectable amounts into their declared UBS accounts.
Bagios has been detained for nearly two years, an unusual
action against a foreign banker by U.S. authorities. He has
repeatedly waived his right to indictment, spurring speculation
over whether he might be cooperating.
The fresh charges asserted that Bagios worked with a group
of co-conspirators. They include Hansruedi Schumacher, a former
top UBS private banker who later worked at Neue Zurcher Bank and
was indicted in the United States in 2009; Renzo Gadola, a
former top UBS private banker who pleaded guilty to charges of
fraud and conspiracy in December 2010; and Martin Lack, a former
top UBS private banker who was indicted in August 2011.
At the time of his arrest in New York and subsequent
transfer to Florida, Bagios was head of Credit Suisse's
Relationship Management West Coast group, a private banking
unit, according to the bank's website.