Offshore Tax Crackdown Scorecard: UBS, Credit Suisse, HSBC

The U.S. extended its crackdown on offshore tax evasion last week, charging Michael F. Schiavo, a managing director at SCG Consulting Group in Boston, with failing to report his offshore account at HSBC Holdings Plc (HSBA) to U.S. authorities.

Schiavo didn’t file a Report of Foreign Bank and Financial Accounts form, or FBAR, for an account at HSBC Bank Bermuda, prosecutors said. Schiavo agreed to plead guilty in federal court in Boston. Schiavo’s firm serves the venture capital and private-equity industries. He also is a director at Boston Private Bank and Trust Co., a Boston-based commercial bank.

The crackdown has led to criminal charges against UBS, the largest Swiss bank, at least two dozen former UBS clients, four former UBS bankers, and five bankers at Credit Suisse Group AG (CSGN), Switzerland’s second-largest bank. Three former clients of HSBC Plc, Europe’s biggest bank, have been charged.

Below is a summary of the charges filed in federal courts around the U.S.:

UBS: The Zurich-based bank agreed in February 2009 to pay $780 million to defer prosecution for aiding tax evasion by U.S. clients. The bank said its Swiss private bankers helped wealthy Americans evade U.S. taxes from 2000 to 2007. UBS also set up sham offshore companies in tax havens such as the British Virgin Islands, Hong Kong and Panama. UBS said it created misleading forms saying those sham companies, not taxpayers, were the beneficial owners.

Credit Suisse: Four Credit Suisse bankers were indicted in February on a charge of conspiring to help U.S. clients evade taxes through secret bank accounts. Managers in the cross-border business “knew and should have known they were aiding and abetting U.S. customers in evading their U.S. income taxes,” according to the indictment in federal court in Alexandria, Virginia. In the fall of 2008, the bank had “thousands” of accounts with $3 billion in assets not declared to the IRS, according to the indictment. Credit Suisse said it is cooperating in the U.S. investigation of the bankers.

HSBC: The bank was the subject of an IRS summons in April seeking information about Americans who had accounts at HSBC India from 2002 to 2010. Through September 2010, about 9,000 U.S. residents had non-resident Indian accounts of $100,000 or more, and only 1,391 disclosed their accounts to the U.S. in 2009, the IRS said in court filings in California. The clients had deposits of almost $400 million in the accounts. HSBC said it doesn’t condone tax evasion and is cooperating with the U.S.

Bradley Birkenfeld: A former UBS banker, he pleaded guilty to helping wealthy Americans, including billionaire Igor Olenicoff, evade taxes. In 2007, Birkenfeld approached the Justice Department and revealed what a prosecutor later described as a “massive tax scheme” at UBS. He also detailed the scheme to investigators from the U.S. Senate, the IRS and the Securities and Exchange Commission. He was later indicted and pleaded guilty in Fort Lauderdale, Florida, to his role in the UBS conspiracy. In August 2009, he was sentenced to 40 months in prison, 10 months more than prosecutors sought. He asked President Obama to reduce his sentence, saying he was treated unfairly as a whistle-blower.

Igor Olenicoff: A billionaire real-estate developer, Olenicoff pleaded guilty in December 2007 in Santa Ana, California, to filing a false tax return. He failed to declare accounts at UBS, where he once had $200 million. He received two years’ probation and paid $52 million in back taxes, interest and penalties.

Raoul Weil: A former chief executive officer of global wealth management at UBS, Weil was indicted in November 2008 in Fort Lauderdale on a charge of helping wealthy Americans hide assets from the IRS. He was declared a fugitive in January 2009.

Renzo Gadola: A UBS banker from 1995 to 2008, Gadola pleaded guilty in December 2010 to conspiring with a Swiss banker to encourage U.S. clients to move undeclared UBS accounts to Basler Kantonalbank, based in Basel, Switzerland. Gadola and the banker, who once worked at UBS, also told clients not to join a program that led 18,000 Americans to declare offshore accounts to the IRS, prosecutors said. Gadola, once a UBS executive director who serviced hundreds of undeclared accounts, has cooperated with prosecutors in a bid for leniency when he is sentenced in federal court in Miami.

Marco Adami: He was one of four Credit Suisse bankers indicted in February on a charge of conspiring to help U.S. customers evade income taxes by using secret Swiss accounts. Adami is an Italian national who was a member of senior management who catered to high net worth clients in North America, prosecutors allege. He has not appeared in court.

Emanuel Agustoni: He was one of four Credit Suisse bankers indicted in February on a charge of conspiring to help U.S. customers evade income taxes by using secret Swiss accounts. A Swiss citizen, he left Credit Suisse and continued the fraud at two other private Swiss banks, prosecutors alleged. He has not appeared in court.

Michele Bergantino: He was one of four Credit Suisse bankers indicted in February on a charge of conspiring to help U.S. customers evade income taxes by using secret Swiss accounts. A Swiss citizen, he worked at Credit Suisse from 1982 until 2009. He has not appeared in court.

Roger Schaerer: He was one of four Credit Suisse bankers indicted in February on a charge of conspiring to help U.S. customers evade income taxes by using secret Swiss accounts. A Swiss citizen who lived in the U.S., he worked in New York. He has not appeared in court.

Christos Bagios: A Credit Suisse banker, he was charged in January with helping 150 American clients hide as much as $500 million in assets from U.S. tax authorities when he worked at UBS, where he spent more than 15 years. A Greek citizen who lived in Switzerland, he is free on bail in south Florida.

Hansruedi Schumacher: A former Neue Zuercher Bank manager who once ran the cross-border business for UBS, Schumacher was indicted in August 2009 in Fort Lauderdale on a charge of helping U.S. citizens evade taxes on UBS and NZB accounts. He was declared a fugitive in December 2009.

Matthias Rickenbach: A Zurich lawyer, Rickenbach was indicted with Schumacher in August 2009 on a charge of helping Americans evade taxes on UBS and NZB accounts. He was declared a fugitive in December 2009.

Mario Staggl: A Liechtenstein investment adviser at New Haven Trust Co., Staggl was indicted with Birkenfeld in April 2008 on a charge of helping wealthy Americans evade taxes. He was declared a fugitive in May 2008.

Jules Robbins: A retired watch distributer from Jericho, New York, Robbins pleaded guilty in April 2010 in New York, admitting he failed to declare a UBS account that held $42 million in 2007. He was sentenced in September 2010 to one year of probation. He paid a $20.8 million civil penalty and a $2,000 fine.

Federico Hernandez: A financial adviser who ran 2020 Emerging Inc., Hernandez pleaded guilty in April 2010 in New York. He admitted setting up sham accounts in the British Virgin Islands and Panama to hide his UBS accounts worth $8.8 million in 2006. He was sentenced in September 2010 to one year in prison, fined $4,000 and ordered to pay $84,423 in restitution to the IRS. He agreed to pay a civil penalty of $4.4 million. He also pleaded guilty in state Supreme Court in New York and was fined $25,000.

Jack Barouh: The former owner of a watch company sold to Fossil Inc. for about $50 million, Barouh pleaded guilty in February 2010 to failing to disclose about $10 million in offshore assets. He was sentenced in Miami in April 2010 to 10 months in prison and fined $5,000.

Kenneth Heller: A disbarred New York maritime attorney, Heller opened a UBS account in 2006 with $26.4 million, prosecutors charged in April 2010. Heller later transferred $20 million to a smaller private Swiss bank, prosecutors said. Heller, who was charged with tax evasion and failing to file an FBAR, was arrested in Hoboken, New Jersey. He was indicted in May 2010 and indicted again in March. He awaits trial.

Sybil Nancy Upham: A New York resident, Upham was indicted in April 2010 in New York on charges of conspiracy, filing false tax returns and failing to file FBARs. Upham was charged with hiding UBS accounts worth $11.3 million in 2007 and later moving $8.5 million to a small Liechtenstein bank. She pleaded guilty in November 2010. She awaits sentencing.

Samuel Phineas Upham: The son of Sybil Nancy Upham, he was indicted in December 2010 on charges that he helped his mother hide more than $11 million through overseas accounts.

Harry Abrahamsen: A New Jersey businessman, he pleaded guilty in April 2010 in Newark, New Jersey, to failing to tell U.S. authorities about almost $800,000 in offshore accounts. He awaits sentencing.

Lucille Abrahamsen Jackson: The daughter of Harry Abrahamsen, she pleaded guilty in Newark in November 2010 to failing to tell U.S. authorities about an account valued at $759,376 in 2003. She was sentenced to one year of probation on May 23.

Steven Michael Rubinstein: A Florida accountant who worked at an international yacht company, he pleaded guilty in June 2009 to filing a tax return that failed to disclose secret UBS accounts that held at least $7 million. A judge in Miami sentenced him in October 2009 to 12 months of home detention.

Robert Moran: A Florida yacht broker, he pleaded guilty in Fort Lauderdale in April 2009 to filing a tax return that failed to disclose $3.4 million held at UBS. He was sentenced in November 2009 to two months in prison and five months of home detention.

Jeffrey Chernick: A New York toy salesman, Chernick pleaded guilty in July 2009 to filing a false tax return that concealed $8 million at UBS. In his plea, Chernick implicated four others in detailing a $45,000 bribe paid to a Swiss government official. In October 2009, he was sentenced in Fort Lauderdale to three months in prison. The judge later reduced Chernick’s term to one month.

Juergen Homann: A New Jersey businessman, Homann admitted in September 2009 in Newark that he didn’t report $6.1 million in UBS-held assets to the U.S. government. He was sentenced in January 2010 to five years’ probation and fined $60,000.

John McCarthy: A California businessman, McCarthy pleaded guilty in Los Angeles in October 2009 to failing to file a tax report for a UBS account holding more than $1 million. He was sentenced in March 2010 to six months of home detention, with 300 hours of community service and a $25,000 fine.

Roberto Cittadini: A former sales manager at Boeing Co., the resident of Bellevue, Washington, pleaded guilty in October 2009 to filing a false tax return that hid income on $1.86 million in assets at UBS. He was sentenced in Seattle in January 2010 to one year of probation, including six months of home detention, and 200 hours of community service. He also was fined $10,000 and ordered to pay $17,985 in restitution.

Richard Werdiger: A resident of Purchase, New York, Werdiger was indicted in April 2010 on charges of conspiracy, filing false tax returns and failing to file FBARs. Werdiger, who sold diamonds and jewelry through companies including Michael Werdiger Inc., opened three UBS accounts through sham entities in Panama and Liechtenstein and communicated with the bank through the code name “Trygon,” prosecutors said. By 2003, his accounts totaled $7 million, according to the government. He pleaded guilty in March and awaits sentencing.

Ernest Vogliano: A New York resident, Vogliano opened UBS accounts through shell corporations in Liechtenstein and Hong Kong that were valued at $4.9 million in 2000, prosecutors said. After 2008, he withdrew hundreds of thousands of dollars through traveler’s checks, prosecutors said. Vogliano was indicted in April 2010 in New York. He pleaded guilty in December 2010. He was later sentenced to two years of probation and fined $10,000.

Shmuel Sternfeld: A resident of Tel Aviv, Sternfeld opened a UBS account in 2004 in the name of a Hong Kong shell corporation, prosecutors said. Sternfeld transferred money to buy a condominium in Florida and later moved funds to an account in the Czech Republic, prosecutors said. His account was valued at $2.9 million in 2005. Sternfeld was indicted in April 2010 in New York. His case is pending.

Leonid Zaltsberg: A former UBS client who helped lead his Ukranian soccer team to six Soviet championships, he pleaded guilty in July 2010 in Newark to failing to tell U.S. authorities about $2.6 million in an offshore account. He was sentenced in December 2010 to 12 months of home confinement and fined $3,000.

Paul Zabczuk: A resident of The Woodlands, Texas, Zabczuk pleaded guilty in Fort Lauderdale in April 2010 to charges that he filed a false tax return and didn’t disclose his UBS account. He was sentenced in July 2010 to one year of home detention and fined $2,000.

Bernard Goldstein: A resident of Carlsbad, California, who exports oil pipeline products to Russia, he was indicted in November 2010 on charges of conspiracy, filing false tax returns and failing to file FBARs. Prosecutors said his UBS account held more than $2.5 million in 2003. His case is pending in San Diego.

Gregory Rudolph: A resident of Brookline, Massachusetts, he was charged in October 2010 with failing to file FBARs on a UBS account that held at least $1.5 million. He pleaded guilty in federal court in Boston in February and agreed to pay a civil penalty of $980,065. He awaits sentencing.

Peter Schober: A Boston resident in the investment management business, he was charged in October 2010 with failing to file FBARs on an account that held at least $1 million. He pleaded guilty in November 2010 in Boston. He awaits sentencing.

Jeffrey Chatfield: A California consultant who advised private companies seeking to go public, Chatfield pleaded guilty in November 2010 to failing to declare a UBS account that once had a balance of about $900,000. He was sentenced in March to three years of probation and ordered to pay a civil penalty of $96,269.

Andrew Silva: A Virginia surgeon, he pleaded guilty in February 2010 to conspiring with an HSBC banker and a Zurich attorney to hide a $250,000 account from the IRS by smuggling 26 cash payments to the U.S. Silva was sentenced in Alexandria, Virginia, in June 2010 to four months of home detention, fined $20,000, forfeited $211,200 and paid $16,484 in back taxes.

Felix Mathis: A Swiss lawyer, he was indicted in July 2010 on charges that he helping Silva hide assets from the IRS and smuggle $235,000 into the U.S. His case is pending in Alexandria.

Vaibhov Dahake: A New Jersey businessman, he pleaded guilty in April to conspiring with five HSBC bankers to hide his Indian accounts from the IRS. He admitted conspiring with two bankers in New York, one in Fremont, California, and two in Thane, India. He awaits sentencing.

Edward Gurary: The chief executive officer of Dighton Capital Management, he pleaded guilty in March to hiding accounts at UBS and Credit Suisse from the IRS. He admitted in federal court in Cleveland that he controlled a UBS account that held as much as $947,000. He awaits sentencing.

Arthur Joel Eisenberg: A resident of Seattle, he pleaded guilty in December 2010 to filing a false tax return on UBS accounts that prosecutors said held as much as $4.2 million. In March, he was sentenced to three years of probation and fined $25,000. He also was ordered to pay an FBAR penalty of $2.1 million.

To contact the reporter on this story: David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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