RR Phantom
Location : Wasted Space
Job/hobbies : Cayman Islands Actuary
 |  Subject: US probe reveals Swiss bank tricks  Sat Feb 21, 2009 8:12 pm | |
| Swiss bank UBS AG used coded language in internal emails and memos, created hundreds of sham offshore entities and lied to US officials in an elaborate scheme to conceal the overseas accounts of wealthy Americans, the Internal Revenue Service claimed in federal court documents.
The IRS filed the documents this week seeking to force the bank to turn over records for an estimated 52,000 US customers who allegedly violated American tax laws by concealing Swiss accounts worth at least $US14.8 billion ($23 billion).
''UBS systematically violated and circumvented its obligations .... all in order to help its US clients conceal from the IRS their Swiss accounts at UBS,'' IRS agent Daniel Reeves said in the affidavit, which charges that the scheme ran from 2000 to 2007.
The internal bank emails and memos obtained by the IRS were included in the 305-page filing.
A UBS spokesman declined comment on Friday, noting only that UBS has previously said it would fight the IRS effort - known as a ''John Doe summons'' - to learn the identities of thousands of American clients. Earlier this week, UBS agreed to pay $US780 million and disclose up to 300 UBS account holders to avoid criminal prosecution for those transactions.
According to the IRS, UBS allegedly staged training sessions so that ''client advisers'' could travel frequently to consult with secret US customers without attracting the attention of tax agents or law enforcement officials. They were told to keep ``an irregular hotel rotation'' and falsely claim on customs forms that they were in the US on pleasure, not business.
UBS also maintained a 24-hour, seven-day-a-week ''hot line'' for advisers to call if they ran into trouble with authorities, according to one UBS document filed with the court.
''Travel laptops were to have a generic UBS PowerPoint presentation to show US authorities in the event of a border search,'' the IRS affidavit said.
The documents show UBS was worried that US officials might tap their advisers' telephones or eavesdrop on mobile phone conversations. No one was allowed to bring a printer to the US out of fear that creation of a document might trigger criminal liability, according to one document.
Colour codes
At least one UBS adviser used code language in emails to describe his business dealings, adding that ''orange'' meant euros; ''green'' was US dollars; and ''blue'' signified British pounds. The email from this adviser, ''Dieter,'' that a ''C'' was $100,000, a ''nut'' was $250,000 and a ''swan'' $1 million.
The email goes on to describe a transaction involving ''2.5 orange nuts'' and ''2.05 green nuts,'' ending with ''all clear?''
Another method to hide dealings with US account holders was to create fake entities and corporations in other countries, according to the IRS affidavit. In 2004, the IRS filing said, UBS planned to create about 900 of these ''dummy'' entities to conceal Americans' Swiss accounts.
''In truth, the accounts were owned and controlled by US taxpayers,'' the IRS affidavit said.
UBS was apparently upfront at first with its rich American customers about the illegal nature of the secret accounts, according to one internal email.
The IRS said a declaration that clients were asked to sign flatly stated: ''I would like to avoid disclosure of my identity to the US Internal Revenue Service.''
But that did not go over well with the Americans, according to a 2000 UBS email included in the IRS filing.
''This sentence was refused by many clients, provoked angry outcries and we were being told, which if signed, fully incriminates a US person of criminal wrongdoing should this document fall into the wrong hands,'' according to the email. It said the offending language was replaced with this: ''I consent to the new tax regulations.''
US District Judge Alan Gold has scheduled a hearing on Monday afternoon on the IRS lawsuit. In a filing on Friday, UBS lawyers asked that Gold not embark on a fast-track process sought by US officials because of the ``extraordinary importance, consequences and international implications of these issues''.
The IRS lawsuit was filed in Miami because two criminal prosecutions of UBS executives have taken place in South Florida, including that of ex-private banker Bradley Birkenfeld. Birkenfeld, who helped a California billionaire evade taxes, has pleaded guilty and is cooperating extensively with US investigators.
LNK |
|
