Swiss Banker Is Accused of Advising Americans to Evade Taxes

[Freedom Biz]

Thanks to lgraham for an earlier post from the Times that led me to find this one.

From the New York Times online

December 14, 2010

Federal prosecutors on Tuesday accused a former UBS banker of advising wealthy American clients to avoid disclosing their hidden offshore accounts held at a smaller Swiss bank because they were unlikely to attract scrutiny from the United States tax authorities.

The United States attorney’s office in Miami accused Renzo Gadola, the head of RG Investment Partners, an investment advisory firm in Zurich, of conspiracy to defraud the United States by helping wealthy Americans evade taxes from 2000 through this month.

Mr. Gadola, a Swiss citizen, was employed by UBS from 1995 to 2008, when he left to form RG Investment Partners. He was arrested on Nov. 8 and was to appear in Federal District Court in Miami on Tuesday.

Prosecutors also said that an unidentified co-conspirator, who was a former senior UBS private banking executive, had worked as Mr. Gadola’s partner to help wealthy Americans evade taxes through Basler Kantonalbank, a Swiss cantonal bank in Basel.

The co-conspirator, a Swiss citizen, oversaw hundreds of American clients. When he left in 2003 to set up an independent investment firm in Switzerland, he took about 150 UBS clients with him, prosecutors said.

The accusation, which was filed as a criminal information, underscores how Swiss bank secrecy continues to flourish despite the recent United States crackdown on UBS, Switzerland’s largest bank, in connection with offshore private banking services that enabled wealthy Americans to evade taxes.

In particular, the charge sheds new light on how Swiss bankers continued to sell tax-evasion services even while American authorities turned up the heat on UBS. The nearly four-year scrutiny of UBS, which ended last month, led many larger Swiss banks to alter or discontinue their offshore services. In the wake of the UBS investigation, the I.R.S. said it was increasing its scrutiny of other banks.

According to the criminal information, a wealthy client from Mississippi told the unidentified Swiss banker in September 2009 that he wanted to participate in a voluntary disclosure program from the I.R.S. that allowed taxpayers to come forward and report their secret offshore accounts in exchange for lesser penalties. The client had inherited $400,000 in cash and stored it in a box in Mississippi before putting it in UBS and later Basler Kantonalbank.

But the Swiss banker told the client that his Basler account was too small to bother disclosing and that doing so “would bring trouble for both of them.” When the client pressed further, the Swiss banker suggested that he falsify banking records to make the money look like a loan.

Last month, Mr. Gadola told the client that he and his partner, the unidentified co-conspirator, had withdrawn the client’s money from Basler and were keeping it in cash in their shared offices. “There is no paper trail,” Mr. Gadola told the client, according to the document.

That Mr. Gadola was charged in a criminal information and not indicted suggests that he may be cooperating with American investigators.

[Rogue Knight]

He probably did business with Andre Assange...