Martin Lack, the fourth ex-UBS AG (UBSN) banker to plead guilty to aiding wealthy Americans in evading taxes, avoided prison for a 17-year scheme in which he helped U.S. clients maintain secret overseas accounts.
Lack, a Swiss resident and citizen and an independent investment adviser, was sentenced to five years of probation and fined $7,500 today in federal court in Fort Lauderdale, Florida, where he was indicted in 2011. He surrendered to U.S. authorities on Oct. 14 and pleaded guilty on Feb. 26, when the judge said he was cooperating with prosecutors.
“I apologize for my conduct,” Lack told U.S. District Judge William Dimitrouleas. “I was given an opportunity to make amends for what I’ve done, which I did to the best of my ability.”
Lack is among about three dozen foreign bankers, lawyers and advisers who have been charged since 2009. More than 70 U.S. taxpayers have also been accused. Thirteen Swiss banks are under criminal investigation after Credit Suisse AG (CSGN) pleaded guilty last week to helping American evade taxes.
More than 43,000 U.S. taxpayers have avoided prosecution since 2009 by voluntarily disclosing their offshore accounts to the U.S. Internal Revenue Service and paying back taxes and penalties.
Lack was charged in an indictment with conspiring from 1993 to 2010 to help clients hide assets from the IRS through accounts at Zurich-based UBS, the largest Swiss bank, and a Swiss cantonal bank. That bank, not named in the indictment, is Basler Kantonalbank, according to a person familiar with the matter.
Lack worked at UBS until 2002, when he founded a Zurich-based management firm, Lack & Partner Asset Management AG. He “would and did solicit U.S. customers to open undeclared accounts at UBS and cantonal bank because Swiss bank secrecy would assist U.S. customers to conceal their ownership” of accounts, according to prosecutors.
Dimitrouleas imposed the fine, which prosecutors had not requested. Lack’s attorney, Peter Raben, said Lack has “negative cash flow” of $6,000 a month and is not working.
“Mr. Lack is unlikely to ever earn a substantial amount of money as he did in his heyday,” Raben said.
Other former UBS bankers who have pleaded guilty are Christos Bagios, Renzo Gadola and Bradley Birkenfeld. After serving a prison sentence, Birkenfeld received a whistle-blower award of $104 million for revealing how UBS helped Americans evade taxes.
Gadola pleaded guilty in December 2010, admitting he serviced hundreds of secret Swiss accounts, first at UBS from 1995 to 2008 and later as an asset manager. He helped U.S. prosecutors and was given five years’ probation by a judge who cited his “extraordinary cooperation.”
Gadola and Lack were accused of discouraging taxpayers from joining the IRS voluntary disclosure program.
The case is U.S. v. Lack, 11-cr-60184, U.S. District Court, Southern District of Florida (Fort Lauderdale).
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