January 7, 2014 / 5:20 PM / 6 years ago

UPDATE 2-Ex-UBS banker pleads not guilty in major tax fraud case

By Zachary Fagenson

FORT LAUDERDALE, Fla., Jan 7 (Reuters) - A former high-ranking UBS banker charged with helping Americans dodge taxes through secret Swiss bank accounts pleaded not guilty on Tuesday to fraud conspiracy charges linked to a U.S. tax evasion investigation that shook Swiss banking to the core.

Raoul Weil, a 54-year-old Swiss citizen and former head of global wealth management at UBS, was charged five years ago with conspiring to help thousands of Americans conceal $20 billion in numbered accounts at the bank.

He disputed the charges initially and was listed as a fugitive from U.S. justice until his arrest in mid-October in Bologna, Italy.

Weil’s appearance in federal court in Fort Lauderdale on Tuesday was his second since he was extradited last month. He was granted a $10.5 million bond, pending his arraignment at his first court hearing on Dec. 16.

Wearing a blue suit, blue tie and glasses with thick, black frames, Weil said little in court other than confirm his name and age before the not guilty plea was entered on his behalf.

“We look forward to coming back to Florida, and defend him,” his lawyer, Aaron Marcu, told reporters after the brief court session. A Feb. 18 trial date was later set for the case.

Lawyers for UBS whistleblower Bradley Birkenfeld, the bank employee who revealed the tax fraud conspiracy to U.S. authorities in 2007, fear that Weil may be negotiating a “sweetheart deal” that would spare him a trial and ultimately shield secret account holders and other bankers from prosecution.

The lawyers, who note that Birkenfeld worked directly under Weil when he headed UBS’s former cross-border banking business, have been highly critical of what they see as the U.S. government’s failure to prosecute UBS and some of its former top executives to the full extent of the law.

“Weil can clearly bargain inside information he has that could be embarrassing to American officials or institutions for leniency,” said Stephen Kohn, a Birkenfeld lawyer who also heads the Washington, D.C.-based National Whistleblowers Center.

“Weil knows where all the skeletons are buried,” Kohn added. “The Justice Department must work closely with the IRS and Department of State to make sure that every person guilty of tax evasion in the UBS America’s program are identified and prosecuted,” he said.

Marcu maintains that his client has consistently denied wrongdoing in the case. In Tuesday’s order setting the jury trial, Weil was given until Feb. 12 to change his plea to guilty. That would signal a likely deal with U.S. justice and Internal Revenue Service officials.

If convicted at trial, Weil faces up to five years in prison for conspiracy to commit tax fraud.

In a case that resonated throughout the tightly knit Swiss banking community, UBS paid a record $780 million fine in 2009 and agreed to provide U.S. tax authorities with the names of about 4,450 American clients with accounts at the bank. In doing so, UBS effectively agreed to break Switzerland’s jealously guarded tradition of banking secrecy to avoid feared criminal charges against the bank and some of its senior executives.

Birkenfeld, who knew the inner workings of UBS and spilled secrets about his former employer’s dealings with U.S. clients, won a record-setting $104 million reward from the U.S. Internal Revenue Service for exposing the UBS tax fraud conspiracy. But he was jailed for 30 months after the government found he had withheld information about a billionaire U.S. client.

The reward for Birkenfeld came as U.S. authorities were investigating a wide range of tax evasion cases involving foreign banks in several countries, including the United Kingdom, Liechtenstein, Israel, and India as well as Switzerland.

The banks included HSBC, a global banking and financial services firm with significant business operations in Hong Kong and Asia.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below