-- A top Swiss banking executive was part of a broad conspiracy that has helped thousands of American clients hide $20 billion in assets from the IRS by using secret foreign accounts, according to an indictment unsealed Wednesday in Florida.
Raoul Weil, 49, head of private banking and cross-border business for Swiss bank giant UBS ubs, was accused of conspiring to defraud the U.S. through income tax evasion in a scheme that included other, unidentified UBS officials, along with their U.S. clients.
"Every American who pays his or her taxes should be offended that a select few use anonymous offshore accounts to avoid paying their fair share," said R. Alexander Acosta, the U.S. Attorney in Florida's southern federal district.
According to the federal indictment, Weil and other conspirators "referred to the United States cross-border business as 'toxic waste' " because they knew it did not comply with U.S. tax laws. The indictment also said conspirators:
•Used encrypted laptops, numbered accounts, nominee entities and other counter-surveillance tactics as UBS bankers traveled to and from the U.S. to advise clients on the overseas holdings. About 32 bankers traveled to the U.S. and met roughly 3,800 times with clients in 2004 alone, prosecutors allege.
•Changed the wording of a UBS document that stated "I would like to avoid disclosure of my identity to the U.S. IRS" in 2000 after American clients voiced fear the form could be used against them as evidence of tax evasion.
•Instructed UBS bankers to avoid logging unauthorized meetings with American clients in the bank's internal computer system.
The indictment also alleged that Weil in August 2006 opted to continue the $200 million annual business, rejecting two UBS managers' recommendations to shut it down or sell it as too costly and potentially harmful to the bank.
Weil "denies any suggestion that he was aware of, engaged in or tolerated any illegal conduct," and will fight the indictment, his defense attorney, Aaron Marcu, said in a statement. UBS said Weil would relinquish his duties pending resolution of the case.
Prosecutors said Weil, a Swiss citizen, is believed to be in his home country, which does not normally allow extradition. If tried and convicted, he could face a maximum five-year prison term.
The indictment comes five months after former UBS banker Bradley Birkenfeld pleaded guilty to a similar conspiracy charge. Birkenfeld, who is awaiting sentencing, has been providing information about offshore tax evasion to federal prosecutors and the Senate Permanent Subcommittee on Investigations.