Legal News

?I Was Employed By UBS . . . I Was Incentivized to Do the Business?

By Dan Slater

U.S. Attorney R. Alexander Acosta exits U.S. District Court in Fort Lauderdale, Fla., where Bradley Birkenfeld, a former UBS AG banker, pleaded guilty. Photo: Reuters

“I was employed by UBS . . . I was incentivized to do this business,” explained an ex-UBSer when asked why he participated in a scheme to help a wealthy client evade taxes. The banker, Bradley Birkenfeld, pleaded guilty yesterday in Florida federal court. In May he was indicted in May for allegedly helping a billionaire real estate client evade taxes on $200 million held in Swiss and Liechtenstein bank accounts. Here are stories from the WSJ and NYT. Here’s past LB coverage.

Here’s what allegedly happened: Birkenfeld, 43, was the director of important clients for UBS in Geneva from 2002 to 2006, and is a partner and chairman at Union Charter, which caters to wealthy investors through offices in Geneva, Dubai and Hong Kong. According to the indictment, Birkenfeld and a co-defendant created fictitious trusts and corporations to conceal the ownership and control of offshore assets. They also advised clients to destroy bank records and helped them file false tax returns, the indictment reportedly said.

According to prosecutors, Birkenfeld has provided evidence showing the tactics the bankers advised clients to use to hide their wealth, including purchasing artwork and jewels with funds from Swiss accounts.

Birkenfeld, who’s represented by Danny Orato, faces as many as five years in prison and $250,000 in fines. The judge set sentencing for August, but, reports the WSJ, prosecutors are expected to seek a delay “while they try to use Birkenfeld’s knowledge to pierce the centuries-old secrecy for which UBS and other Swiss banks are known.”

Full post as published by Law Blog - WSJ.com on June 20, 2008 (boomark / email).