Three ex-UBS AG clients, including two who ran venture capital firms, were indicted on charges of hiding millions of dollars in assets from U.S. tax authorities through the use of secret offshore accounts.
Stephen M. Kerr and Michael Quiel, who separately ran venture capital firms, were charged in an indictment made public yesterday in federal court in Phoenix. A former San Diego attorney, Christopher M. Rusch, was arrested Jan. 29 in Miami after being expelled from Panama at the request of the U.S. government.
Kerr, who ran CCN Worldwide Inc., had accounts worth more than $5.6 million in 2007 that he failed to report to the Internal Revenue Service, according to a Justice Department statement and the Dec. 8 indictment.
Quiel, who ran Legend Advisory Corp., had accounts valued at more than $2.6 million in 2007 that he also failed to report to the IRS, according to prosecutors and the indictment. He was arrested in the Phoenix area.
Rusch had signature authority over secret accounts held by Kerr and Quiel, and helped facilitate their transactions, prosecutors said. Rusch also had secret offshore accounts in the names of others at UBS and a Panamanian bank, prosecutors said.
Rusch used a Panamanian entity he controlled to help Kerr buy a golf course in Colorado with money moved from Kerr’s Swiss accounts, prosecutors said. Rusch used his client trust account to transfer funds to Swiss accounts held by Kerr and Quiel and to repatriate their funds back to the U.S., prosecutors said.
“I expect that my client is going to vigorously defend himself,” Michael Lipman, an attorney for Rusch with Duane Morris LLP, said in a telephone interview. “We expect to be exonerated at the appropriate time.”
In the past three years, prosecutors have filed tax charges against at least 40 U.S. clients of UBS and Credit Suisse Group AG, Switzerland’s two biggest banks; London-based HSBC Holding Plc, Europe’s biggest bank; and other banks. They also have charged at least 24 bankers, advisers and attorneys.
Kerr, Quiel and Rusch were charged with conspiring to defraud the IRS. Kerr and Quiel were charged with filing false tax returns in 2007 and 2008 and with failing to file Reports of Foreign Bank and Financial Accounts for those years.
The case is United States v. Kerr, 11-cr-02385, U.S. District Court, District of Arizona (Phoenix).