Two Swiss men who acted as “full service tax evasion advisers” helped U.S. clients hide hundreds of millions of dollars from tax authorities, while delivering cash in hotels and through a child courier, prosecutors said.
Hans Thomann and Josef Beck, who worked as independent financial advisers, conspired to help Americans defraud the Internal Revenue Service and ran unlicensed businesses that moved cash for clients, according to charges filed yesterday in federal court in Manhattan.
Thomann helped clients hide $138 million in assets from the IRS and Beck helped conceal $129 million, according to indictments unsealed today. Working separately, they helped clients move cash, using street corners and hotel rooms to evade detection, prosecutors said today in a statement. Beck even used a child “to make a drop,” prosecutors said.
Prosecutors said the men worked with Wegelin & Co., the 270-year-old private bank, which last month became the first Swiss lender indicted in the U.S. The Justice Department has charged at least 23 foreign bankers, advisers and attorneys, and at least 40 U.S. taxpayers in a crackdown on offshore tax evasion since 2008.
“Hans Thomann and Josef Beck acted as full service tax evasion advisers to their American clients,” Manhattan U.S. Attorney Preet Bharara said in the statement. Beyond aiding clients in hiding income overseas, they “helped their clients moves hundreds of thousands of dollars across the Atlantic without a trace.”
Both Thomann, 61, and Beck, 46, met clients in Manhattan hotels to hand them cash they couldn’t withdraw without visiting Switzerland and pick up money to deposit in their undeclared accounts, according to the indictments.
Beck, who ran the asset-management firm Beck Verwaltungen AG, also gave addresses to his clients in the U.S. and Israel where they could pick up or drop off cash, and sometimes they gave cash to one another, prosecutors said.
A person identified as “Client 2” faxed Beck a letter to withdraw $150,000 in 2009 from Wegelin, according to the indictment. An “unknown person” told him to go to an address in Brooklyn, New York, at a particular time, the indictment said.
Upon Client 2’s arrival, “a small child of approximately five years of age exited from the home located at the specified address, walked up to Client 2’s car, and handed Client 2 a brown paper bag containing approximately $150,000 in cash,” according to the indictment.
Later that year, Client 2 told Beck by fax that he wanted another $180,000 in cash from Wegelin, the indictment said. Two weeks later, another unknown caller directed him to a Brooklyn address, where a man of age 40 to 45 walked up to his car and gave him a bag with $180,000 in cash, according to the indictment.
An unidentified man also made four cash deliveries of about $100,000 each to the home in Queens, New York, of Client 4, according to the indictment.
Thomann was a banker at UBS AG (UBSN), Switzerland’s biggest bank, from 1993 until 2003, according to his indictment.
U.S. prosecutors charged Zurich-based UBS in 2009 with helping Americans hide assets from the IRS. UBS avoided prosecution by admitting it aided tax evasion, paying $780 million and handing over data on 250 accounts. It later disclosed another 4,450 accounts, causing U.S. customers to seek new banks.
Thomann helped 33 former UBS clients transfer their accounts to other banks, including Wegelin and several unidentified institutions, according to his indictment. They were referred to as “a Swiss bank,” “the Swiss branch of an Israeli bank,” “a Swiss cantonal bank” and “Swiss- Liechtenstein Bank No. 1.”
The Thomann indictment also details how he helped clients deposit and withdraw cash without him having to carry money into the U.S. A New Jersey client typically gave him between $60,000 and $80,000, and once gave him $140,000, according to the indictment.
In helping clients keep their offshore accounts secret, Thomann worked with a Swiss financial adviser already under indictment, Beda Singenberger, and a Swiss lawyer charged in the U.S., Matthias Rickenbach, according to the indictment.
Beck also helped UBS clients open undeclared accounts at other banks, including Wegelin, an “international bank,” and two Swiss banks, according to the indictment.
Thomann and Beck face as many as 10 years in prison. They are among at least 21 bankers, advisers or lawyers outside the U.S. who were charged in American courts. None have appeared.
Credit Suisse Group AG (CSGN), the second-largest Swiss bank, said July 15 that it was a target of a criminal probe by the Justice Department over former cross-border private-banking services to U.S. customers. On July 21, seven current and former Credit Suisse bankers were indicted on a charge of conspiring to help U.S. clients evade taxes through secret accounts.
The IRS has said 30,000 U.S. taxpayers with offshore accounts have avoided prosecution since 2009 by entering a limited amnesty program, paying back taxes and saying who helped them hide their accounts from authorities. Hundreds of taxpayers in the program have given prosecutors information that has helped them build criminal cases against bankers and advisers.
“We continue to obtain access to more and more information on individuals and institutions who are involved in hiding offshore assets,” Victor W. Lessoff, acting special agent in charge of the IRS New York field office, said in a statement.
The cases are U.S. v. Thomann, 12-cr-00212, and U.S. v. Beck, 12-cr-00211, U.S. District Court, Southern District of New York (Manhattan).
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