Reuters reported today that Authorities Charge Swiss Banker, Attorney in Tax Probe. Federal authorities charged Stefan Buck and Edgar Paltzer with one count of conspiracy for allegedly helping American clients hide millions of dollars in offshore accounts in order to avoid paying taxes. The indictment was filed in Manhattan Federal Court on Tuesday.
The indictment stated that Stefan Buck is the Head of Private Banking at Swiss Bank No. 1 and is also a member of the bank’s executive board. Edgar Paltzer is a partner at a Swiss Law Firm and was admitted to the New York Bar in 1988. Further investigation by Reuters showed that Bank Frey lists Stefan Buck as its head of private banking and a member of its executive board on its website.
What’s really interesting about this case is why it drew the attention of the Federal Authorities.
In March 2009, Swiss bank UBS AG (UBSN.VX) agreed to pay $780 million to settle charges brought by the Justice Department. The oldest Swiss bank, Wegelin & Co, pleaded guilty in January to helping wealthy Americans evade taxes and was sentenced to pay nearly $58 million in penalties.
According to the Manhattan U.S. Attorney’s office, which brought the charges, Niederer Kraft & Frey saw an increase of 300 percent in U.S. taxpayers as clients between the time of UBS’s settlement and Wegelin’s indictment in February 2012. Around $938 million, or 44 percent, of the bank’s $2.1 billion in managed assets as of September 2012 was held by U.S. taxpayers, prosecutors said. Buck and Paltzer opened and managed undeclared accounts for U.S. clients who had been informed by other Swiss banks that they had to close their accounts there.
So if you are planning to deposit some or all of your assets offshore in a Swiss Bank Account where client privacy has always been of paramount importance, you may wish to consider the significance of this case. It certainly seems that the Justice Department is becoming more successful in piercing the International Privacy Veil.