Ex-UBS employee says bank helped clients hide millions
Ex employee testifies in US court over alleged practices of Swiss bank aimed at helping wealthy clients evade tax
A former UBS private banker has admitted he conspired to help a US
billionaire evade $7.2m (£3.65m) in income taxes after agreeing to co-operate
with prosecutors in the case.
Birkenfeld an American citizen, was accused of helping a wealthy US property
developer, identified as Igor Olenicoff, to evade taxes on $200m (£102m) held in
UBS and other accounts in Switzerland and Liechtenstein.
But Birkenfeld had ‘numerous’ other American clients, according to his
lawyer, Danny Onorato.
‘He’s going to tell the government everything he knows about what was going
on at UBS,’ said Onorato.
Birkenfeld said he and other senior managers at the Swiss bank, had helped US
clients in concealing their ownership of the assets held offshore by helping
these wealthy customers create ‘nominee and sham entities’, prosecutors said.
Birkenfeld told prosecutors that he took these actions ‘to prevent the risk
of losing the approximately $20bn (£10.2bn) of assets under management in the
United States . . . which earned the bank approximately $200m (£102m) per year
in revenues’.
Birkenfeld said he and others also advised US clients to place cash and
valuables in Swiss safety deposit boxes, and purchase jewels, artwork and luxury
items using the funds in their Swiss bank account while overseas, prosecutors
said.
‘I was employed by UBS and paid a large salary and incentivised to do this
business,’ Reuters quoted Mr Birkenfeld as saying at his hearing in Florida.
Birkenfeld, who could face a maximum sentence of five years, turned
whistleblower after an acrimonious parting with UBS in 2006.
UBS said it was treating these investigations with the ‘utmost seriousness’
and would ‘appropriately and responsibly address and correct any issues raised
in the investigations’.
It added: ‘UBS will continue to work with US governmental authorities in an
effort to achieve a satisfactory resolution of these matters.’
Birkenfeld was indicted in May, along with Mario Staggl, a Liechtenstein
national, and ‘others known and unknown’, for his role in helping Olenicoff
evade paying taxes by helping to conceal $200m in Switzerland and Liechtenstein.
Staggl is still at large. Olenicoff has pleaded guilty to filing a false tax
return.
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Birkenfeld was formerly part of a team headed by Martin Liechti, UBS’s head
of international private banking for North and South America. Liechti was
detained by US authorities in April and remains in the US as a ‘material
witness’.
Birkenfeld’s services to American clients violated a 2001 agreement that the
Swiss bank entered into with the US, the US attorney’s office said.
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