| NEW YORK
NEW YORK Aug 16 A Swiss lawyer accused of
helping U.S. clients conceal millions of dollars in offshore
accounts pleaded guilty to conspiracy to commit tax fraud in
federal court in New York on Friday.
Edgar Paltzer, 57, a dual U.S.-Swiss citizen, admitted to
opening bank accounts in Switzerland in the name of entities he
formed for U.S. citizens, knowing they intended to evade taxes.
"I was aware that this conduct was wrong," he said, pleading
guilty to newly filed criminal charges as part of a plea
As part of his plea, Paltzer agreed to forfeit any fees he
earned and cooperate with the U.S. government. "His cooperation
is complete and without any limitation," Thomas Ostrander,
Paltzer's lawyer, said after the hearing.
Paltzer, a former partner of Swiss law firm Niederer Kraft &
Frey who is licensed to practise in New York, was first charged
in April on one count of conspiracy alongside Stefan Buck, then
head of private banking at Bank Frey & Co AG.
That indictment accused them of conspiring with U.S.
taxpayers from 2000 through at least 2012 to help them hide
their Swiss accounts from the Internal Revenue Service.
The case shined a light on Bank Frey, one of the smaller
Swiss private banks with just 1.9 billion Swiss francs ($1.54
billion) under management last year.
Prosecutors say the bank gained U.S. clients as the Justice
Department pursued other banks.
U.S. authorities say that by the third quarter of 2012,
about 44 percent of the bank's assets under management were for
U.S. taxpayers. The number had grown 300 percent between
February 2009 and February 2012 amid prosecutions of rival banks
UBS AG and Wegelin & Co.
UBS agreed in February 2009 to pay $780 million and entered
into a deferred prosecution agreement to resolve a Justice
Wegelin, the oldest Swiss bank, announced it would close
after pleading guilty in January to helping wealthy U.S.
citizens avoid paying taxes, ultimately resulting in orders that
it pay around $74 million.
In Bank Frey's annual report for 2012, Chairman Markus Frey
said "the bank has also been affected by the issue of client
relationships with U.S. persons," adding the bank had engaged in
"intensive efforts" to ensure it didn't hold untaxed U.S.
The bank had as recently as May been considering applying
for a license to open in the United States to avoid a U.S.
Frey, the bank's founder, had also been a partner in
Niederer Kraft & Frey. But he resigned on April 25, with
Niederer Kraft at the time saying it "concluded that it was in
the best interests" of the law firm.
More than a dozen Swiss banks, including Credit Suisse Group
AG and Julius Baer, continue to be
investigated for their roles in helping Americans evade taxes.
Swiss banks have hoped to cooperate, but have been stymied by
strict Swiss secrecy laws.
The Swiss government unveiled a plan in July that could
potentially allow the banks to cooperate with U.S authorities,
who are seeking penalties of as much as $10
U.S. prosecutors haven't just targeted offshore tax evasion
In July, Liechtenstein's oldest bank, Liechtensteinische
Landesbank AG, agreed to a $23.8 million settlement to avoid
criminal charges for opening and maintaining undeclared bank
accounts for U.S. citizens.
The case is U.S. v. Paltzer et al, U.S. District Court,
Southern District of New York, No. 13-cr-282.