Not a Lexis Advance subscriber? Try it out for free.
LexisNexis® CLE On-Demand features premium content from partners like American Law Institute Continuing Legal Education and Pozner & Dodd. Choose from a broad listing of topics suited for law firms, corporate legal departments, and government entities. Individual courses and subscriptions available.
In what appears to be another significant step toward prosecuting U.S. citizens with unreported overseas bank accounts, and foreign banks – and bankers – that facilitate them, a Swiss banker has pleaded guilty to conspiring to defraud the Internal Revenue Service in connection with his work as a banking and investment adviser for U.S. customers.
In a statement of facts filed with the plea agreement, the banker, Andreas Bachmann, admitted that between 1994 and 2006, while working as a relationship manager in Switzerland for Credit Suisse, he engaged in a wide-ranging conspiracy to aid and assist U.S. customers in evading their income taxes by concealing assets and income in secret Swiss bank accounts. He also admitted that:
As part of the conspiracy, he traveled to the United States twice each year to provide banking services and investment advice to his U.S. customers. As a matter of practice, prior to traveling to the United States, he notified his executive management, including the head of the subsidiary’s private bank in Zurich and the chief executive officer of the subsidiary, of the planned trip and its objectives.
Although Bachmann had been informed of limitations under U.S. law on his ability to provide investment advice to U.S. account holders regarding U.S. securities, the highest ranking executive at the subsidiary was aware that Bachmann was violating U.S. law. Bachmann effectively was told by the chief executive officer for the subsidiary, “Mr. Bachmann, you know what we expect of you, don’t get caught.”
Bachmann also engaged in cash transactions while traveling in the United States. In the course of arranging meetings with U.S. customers, some clients would request that Bachmann either provide them with cash as withdrawals from their undeclared accounts or take cash from them as a deposit to their undeclared accounts. As part of that process, Bachmann agreed to receive cash from U.S. customers and used that cash to pay withdrawals to other U.S. clients. In one instance, Bachmann received $50,000 in cash from one U.S. customer in New York City and intended to deliver the money to another U.S. client in Southern Florida. Airport officials in New York discovered the cash but let Bachmann keep the money after questioning him. The client in Florida refused to take the money after the client learned about the questioning by New York airport officials, and Bachmann returned to Switzerland with the $50,000 in cash in his checked baggage. Bachmann advised the executive management of the subsidiary about the incident with the cash.
Bachmann also understood that a number of his U.S. customers concealed their ownership and control of foreign financial accounts by holding those accounts in the names of nominee tax haven entities, or structures, which were frequently created in the form of foreign partnerships, trusts, corporations or foundations.
Bachmann, who is represented by William A. Burck of Quinn Emanuel Urquhart & Sullivan LLP, faces a maximum penalty of five years in prison when he is sentenced on Aug. 8, 2014. Prosecutors have agreed to recommend a reduced sentence in exchange for his cooperation.
Bachmann’s plea “is just the latest step in our wide-ranging investigations into Swiss banking activities and demonstrates the Department of Justice's commitment to global enforcement against those that facilitate offshore tax evasion,” said Deputy Attorney General James Cole. “We fully expect additional developments over the course of the coming months.”
Contact the author at email@example.com.
For more information about LexisNexis products and solutions connect with us through our corporate site.