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Superseding Indictment Filed Against Three Former Swiss Bank Employees

Posted in Offshore Account Update on May 22, 2015 | Share

On February 18, federal prosecutors filed a superseding indictment against three former employees of Wegelin & Co, alleging that the employees participated in a conspiracy to help customers evade taxes and conceal assets.  This action is far from the first that has been taken in connection with tax evasion involving Wegelin & Co.  In fact, prior legal sanctions imposed by U.S. authorities actually caused Wegelin & Co. to close in 2013.

Investors should be aware of all efforts by U.S. officials to target bankers of foreign banks.  Often, these bankers end up providing information to U.S. authorities as part of plea agreements. This, in turn, leads to authorities targeting investors.

Once you are under investigation by the IRS for undeclared offshore funds, you may lose the ability to participate in voluntary amnesty programs. That said, it is important that you speak to a Washington DC tax evasion lawyer before you are under IRS investigation to learn whether you can take part of in an Offshore Voluntary Disclosure Program (OVDP) or otherwise qualify for reduced penalties and limited fines by coming forward.

Superseding Indictment Alleges Tax Evasion Conspiracy

A superseding indictment is typically a new indictment returned after a prior case is dismissed due to a legal defect, or it can be a new indictment returned to narrow charges made in an original indictment. In this case, the superseding indictment that was handed down removes the Swiss bank Wegelin & Co. as a defendant because the bank already entered a guilty plea, paid millions in fines and closed its doors.

The superseding indictment also limits facts and charges against Roger Keller, one former Wegelin client advisor who was arrested in Germany on February 2 and who is being held until a judicial review can be completed on the extradition request the U.S. government made.  Charges are unchanged against two other client advisors: Urs Frei and Michael Berlinka.

Wegelin Bank & Co. was indicted back in February of 2012 and was the first foreign bank the Department of Justice indicted on tax evasion charges. The Department of Justice claimed the bank had provided assistance to U.S. taxpayers in hiding more than $1.2 billion in secret foreign accounts that were not reported to the Internal Revenue Service. 

Wegelin entered a guilty plea, admitting it had violated U.S. laws between 2002 and 2010 by opening and maintaining accounts that helped taxpayers evade their income tax obligations.  The bank settled the case, paying $74 million in restitution and fines. 

The bank, which had been established in 1741, sold off core Swiss and non-U.S. businesses in January of 2011 in order to protect clients outside the United States from the fallout of the bank’s legal problems in the United States. Wegelin formally closed in 2013.

Berlinka, Frei and Keller were also named in the original indictment, with the DOJ claiming the three client advisors solicited clients in the United States, going after UBS clients and other clients whose accounts were closed by Swiss banks due to U.S. investigations. 

While the bank these client advisors work for is now gone, the superseding indictment shows that U.S. authorities are far from done with their efforts to punish those who facilitated tax evasion.  Investors need to be wary of these bankers potentially turning over client information. 

Keeping offshore funds secret continues to become more difficult than ever with each legal action U.S. authorities take.  Get in touch with tax evasion lawyer Kevin Thorn if you have offshore accounts that have not been declared.


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