Another UBS client pleads guilty to tax evasion charges in USA

— -- A New York businessman whose Swiss banker assured him that his offshore bank accounts would not be disclosed to the IRS Tuesday became the third American to plead guilty to tax charges related to an investigation of secret accounts at Swiss banking giant UBS.

Jeffrey Chernick, 70, the Stanfordville, N.Y. owner of a firm that represents China and Hong Kong toy manufacturers, pleaded guilty in a Fort Lauderdale federal court to filing a false tax return that failed to disclose $8 million in offshore assets, prosecutors said.

He faces up to three years in prison and a maximum $250,000 fine. But prosecutors wrote in a plea agreement they may recommend leniency based on his cooperation. Defense attorney Douglas Tween could not be reached for comment.

Chernick's guilty plea stems from a broader court battle in which the U.S. Justice Department has demanded names of the American owners of roughly 52,000 secret UBS accounts. UBS and the Swiss government have refused, arguing that compliance would violate their country's renowned banking secrecy laws.

A court conference to assess the status of settlement talks in that case is scheduled for Wednesday.

Chernick signed a court-filed statement of facts in which he acknowledged that he established a Hong Kong corporation in 1981 and opened offshore accounts in the firm's name to conceal commissions paid by Chinese and Hong Kong firms for toy sales in the U.S.

He established other secret offshore accounts over time, including one at a UBS banking location in the Cayman Islands, Chernick acknowledged.

His admissions follow similar recent guilty pleas to tax charges by two other UBS clients: Stephen Michael Rubinstein, a Boca Raton accountant, and Robert Moran, a Fort Lauderdale yacht broker.

Chernick's admissions could increase settlement pressure on UBS in the broader federal case. The bank in February agreed to pay $780,000 in a settlement that deferred criminal prosecution of charges that its bankers made repeated secret trips to the U.S. and illegally helped wealthy American clients evade federal taxes.