October 30, 2009 / 2:42 PM / 10 years ago

Another UBS informant gets leniency for tax fraud

MIAMI (Reuters) - A tax evader turned government informant received a light sentence in Florida on Friday because he cooperated in a high-profile U.S. probe of Swiss bank UBS AG.

The U.S. flag is seen in a reflection outside the Swiss bank UBS offices in New York August 4, 2009. REUTERS/Brendan McDermid

It was the second case this week in which a former U.S. client of the Swiss bank was treated lightly due to the assistance he gave federal investigators.

Jeffrey Chernick, a 70-year-old New York businessman, was sentenced by a federal court judge in Fort Lauderdale, Florida to three months imprisonment followed by one year of probation, a court official told Reuters.

He had initially faced a maximum three years prison term. His lawyers had sought a probation sentence that would have kept him out of jail.

Chernick pleaded guilty in July to using Swiss bank accounts, including one at UBS, to hide more than $8 million from U.S. tax authorities.

His lawyers said in a court filing on Thursday he would pay a tax penalty to the government equivalent to half the highest total of his foreign accounts.

U.S. District Judge James Cohn did not impose a further fine.

The U.S. investigation of UBS formally ended in August with the bank’s agreement to turn over the names of 4,450 wealthy U.S. clients with undisclosed offshore accounts.

In a similar case, Steven Michael Rubinstein, who also cooperated in the UBS probe, was sentenced to one year house arrest and a fine on Wednesday for a multimillion-dollar tax evasion scheme.

Authorities called Chernick’s cooperation substantial in a probe centering on Americans with undisclosed offshore accounts at UBS, a case credited with piercing Switzerland’s famed bank secrecy laws.

Chernick’s role included handing over information that led to an indictment in August of Swiss banker Hansruedi Schumacher and Zurich lawyer Matthias Rickenbach, who were charged in a south Florida court with encouraging Americans to switch secret accounts from UBS to Neue Zuercher Bank (NZB), a private bank, to conceal their wealth.

The Swiss government is investigating the charges against Schumacher and Rickenbach, neither of whom has responded to the U.S. indictment. They allegedly argued that NZB would be better protected from U.S. tax authorities than UBS was because it did not have operations on American soil.

The case is 09-CR-60182 and was filed in the U.S. District Court for the Southern District of Florida.

Reporting by Tom Brown and Jane Sutton; Editing by Alan Elsner

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