Swiss Bank Frey Suspends Executive Following U.S. IndictmentGiles Broom
Bank Frey & Co. said it relieved Stefan Buck of company duties after the U.S. charged the executive and a Swiss lawyer with helping American clients hide millions of dollars in offshore accounts.
“Stefan Buck has been suspended from his duties as head of private banking and member of the executive board in order to give him the time required to defend himself,” Zurich-based Bank Frey said today in a statement on its website. “This step is by no means to be misconstrued as a sign that Bank Frey considers Stefan Buck to be guilty of the accusations.”
Buck and lawyer Edgar Paltzer opened and managed undeclared accounts on behalf of U.S. taxpayers at Swiss banks, according to an indictment released April 16 in the federal court in New York. While the indictment and U.S. attorney Preet Bharara didn’t identify either man’s employer, Bank Frey confirmed it was the “Bank No. 1” referred to in the indictment and that Buck was head of private banking and an executive board member.
Bank Frey said it will support Buck during the proceedings. Both men face a maximum sentence of five years in prison if convicted.
Paltzer, who advised wealthy clients on estate planning and trusts, left Niederer Kraft & Frey in December, Andreas Casutt, a partner at the Zurich-based law firm, said today by phone.
The U.S. is probing at least 11 Swiss financial firms on suspicions they helped Americans hide money from the Internal Revenue Service. Since 2008, U.S. prosecutors have charged at least 88 people, including more than two dozen bankers, lawyers and advisers.
UBS AG, the largest Swiss bank, avoided prosecution in 2009 by paying a fine of $780 million, admitting it fostered tax evasion and handing over data on thousands of clients. Wegelin & Co., the oldest Swiss private bank, pleaded guilty in Manhattan in January to conspiring to help hide more than $1.2 billion in assets from the IRS while opening undeclared accounts for at least 70 U.S. taxpayers who were former UBS clients.
Bank Frey, founded in 2000 and owned by the Frey family, had about 2 billion Swiss francs ($2.1 billion) of client assets under management as of Sept. 30, according to a statement by Bharara last week. About 882.5 million francs, or 44 percent of the total, was held on behalf of U.S. taxpayers living in the U.S., Bharara said.
Markus Frey, chairman of Bank Frey, resigned from Niederer Kraft & Frey to help safeguard the interests of the law firm co-founded by his father, it said in an e-mailed statement today. Frey wants to stress the “clear distinction” between his activities at the bank and the law firm, it said.
“We have a clear policy not to accept clients that are not tax-compliant,” Casutt said.
Casutt declined to comment on whether the law firm is assisting U.S. authorities with their investigations.
The case is U.S. v Paltzer, 13-cr-00282, U.S. District Court, Southern District of New York (Manhattan).