U.S. officials indict 2 Swiss citizens in UBS tax evader case

— -- A Swiss banking executive and a Swiss lawyer have been accused of helping American clients of Swiss banking giant UBS and other suspected tax evaders hide assets in offshore accounts, prosecutors said Thursday.

The indictment, filed one day after UBS agreed to disclose account information for 4,450 U.S. customers, marked an expansion of a broad federal probe into offshore banking as prosecutors focus on intermediaries who allegedly advised tax evaders.

Hansruedi Schumacher, the former head of UBS' cross-border banking business, and Matthias Rickenbach, a Zurich attorney who represents American investors, were charged with conspiring to defraud the IRS and U.S. government.

They could not be located for comment. Alicia Valle, special counsel to the U.S. Attorney's office in Miami, said they are believed to be in Switzerland.

According to the indictment, Schumacher and Rickenbach helped clients hide and control funds in offshore accounts listed in the names of foreign firms and accessed via credit or debit cards not linked to the U.S. They allegedly gave clients cellphones that enabled American clients to contact them without being detected, and hand-delivered cash to the investors.

Their wealthy clientele included John McCarthy and Jeffrey Chernick, UBS clients now charged in tax cases.

The Swiss advisers allegedly helped Chernick, the Stanfordville, N.Y., owner of a firm that represents Asian toy companies, hide assets by creating a Hong Kong entity and opening accounts at UBS and a second Swiss bank.

The second institution was Neue Zuercher Bank, where Schumacher worked after leaving UBS. He told Chernick that NZB accounts were "beyond the reach" of federal prosecutors because the bank had no U.S. locations, the indictment charged.

The Swiss advisers also allegedly told Chernick that $45,000 would be paid to "a Swiss government official" in a bid to learn if Chernick's UBS account would be disclosed to U.S. authorities.

Chernick pleaded guilty last month to filing a false tax return that failed to disclose $8 million in assets.

The indictment accused Rickenbach of helping McCarthy establish a secret UBS account under the name of a Hong Kong company. Rickenbach and Schumacher also helped McCarthy transfer approximately $2.5 million from UBS to NZB, and advised him against bringing hidden assets back to the U.S., the indictment charged.

McCarthy earlier this month agreed to plead guilty to failing to disclose a UBS account used to shift more than $1 million out of the U.S.

Martin Press, a Fort Lauderdale attorney whose law firm represents UBS clients, said prosecutors have been building cases by quizzing tax evaders who apply for an IRS leniency program about their advisers.

"The clients are specifically asked, 'Who got you into this?' and 'What did your accountant know?' " Press said.