Aug. 5 (Bloomberg) -- A New Jersey cancer researcher admitted to hiding millions of dollars from U.S. tax authorities in accounts at UBS AG and other Swiss banks.
Michael Reiss, 60, of Princeton, pleaded guilty today in Manhattan federal court to failing to file reports of foreign bank accounts in 2008 and 2009. Reiss, who faces as long as five years in prison at his sentencing in November, was released on a $200,000 bond.
Reiss had an account at Zurich-based UBS, the largest Swiss bank, starting in 2000 and transferred the assets in that account to another Swiss bank in 2002, prosecutors said in a statement. In 2003, he opened an account at another Swiss bank in the name of Floranova, a sham foundation created to hide his ownership of the assets from the U.S. Internal Revenue Service, prosecutors said. In 2008, the account held $2.59 million.
He will pay a civil penalty of about $1.2 million, his attorney, Paula Junghans, said. Reiss also agreed to pay at least $400,000 in taxes, Assistant U.S. Attorney Daniel Levy said.
Reiss, a Dutch national, isn’t a U.S. citizen. He may face deportation after he’s sentenced, U.S. Magistrate Judge Henry Pitman said. Junghans declined to comment on the case after today’s proceeding.
Reiss is a professor at the Cancer Institute of New Jersey at the University of Medicine & Dentistry of New Jersey’s Robert Wood Johnson Medical School in New Brunswick. He researches cancers of the head, neck, lung and esophagus, according to the school’s website.
“At this time it appears the allegations do not involve university or state monies,” UMDNJ said in a statement. “We are doing everything we can to determine that that is in fact the case.”
Prosecutors said Reiss used the services of Beda Singenberger, a Swiss financial adviser who was charged last month with conspiring with more than 60 U.S. taxpayers to hide more than $184 million in offshore accounts.
The Floranova account held assets valued at about $2.6 million as of March 2008, prosecutors said. In November 2008, Reiss transferred the Floranova assets into another undeclared account, prosecutors said.
UBS in 2009 paid $780 million to avoid prosecution on charges that it helped Americans evade taxes and turned over data on 250 secret accounts. It later handed over information on 4,450 more accounts.
In the past three years, more than two dozen UBS clients have been charged with tax crimes, as well as several bankers and financial advisers. The U.S. dropped its criminal case against UBS in October. Reiss’s plea is the seventh in the Southern District of New York by a U.S. taxpayer who had an undeclared account at UBS or other Swiss banks.
The case is U.S. v. Reiss, U.S. District Court, Southern District of New York (Manhattan).
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