Ex-UBS Banker Pleads Guilty to Tax Evasion Scheme - Financials * US * News * Story

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Ex-UBS Banker Pleads Guilty to Tax Evasion Scheme

Topics:Banking

Sectors:Financial Services | Banks

Companies:UBS AG

By: Reuters | 19 Jun 2008 | 12:46 PM ET

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A former UBS banker pleaded guilty in federal court Thursday to helping an unidentified billionaire real estate developer hide $200 million in assets from U.S. tax authorities.

Bradley Birkenfeld, a 43-year-old U.S. citizen, told a court in Fort Lauderdale that he was a UBS [UBS Loading... () ] banker at the time, received a large salary, and was "incentivized" by his employer to carry out the activities that led to the charges.

He had previously pleaded not guilty. His change of heart and subsequent plea deal could affect an ongoing U.S. investigation of UBS's conduct in relation to services it provided to U.S. clients from 2000 through 2007, and crack open Switzerland's much-vaunted tradition of banking secrecy.

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"He's going to tell the government everything he knows about what was going on at UBS," Birkenfeld's lead attorney, Danny Onorato, told reporters after his court appearance.

U.S. media have reported that UBS is considering whether to reveal the names of up to 20,000 wealthy American clients as federal authorities intensify the probe into offshore bank accounts.

In evidence he gave the court, Birkenfeld said he and other UBS bankers helped the bank earn $200 million a year managing around $20 billion in assets held in offshore tax havens and concealed from the U.S. tax authorities by wealthy Americans, the U.S. Attorney's Office for the Southern District of Florida said.

"Mr. Birkenfeld had numerous U.S. clients. A number of these individuals have been reaching out to U.S. authorities as a result of Mr. Birkenfeld's case," Onorato said.

Unsealed last month, the grand jury indictment against Birkenfeld charged him with conspiring to defraud the United States by helping the unidentified U.S. billionaire create bogus corporations and other entities to conceal the ownership of hidden offshore assets.

Birkenfeld waived a reading of the indictment in the court Thursday and then began to go over a seven-page statement of facts with U.S. District Judge William Zloch. Sentencing was set for Aug. 13.

In a seven-page statement of facts, Birkenfeld said he and other bankers helped wealthy clients set up nominee and sham entities to hold their assets in offshore financial centers, such as Switzerland, Panama, the British Virgin Islands, Hong Kong and Liechtenstein.

According to the statement, they then filed false and misleading U.S. tax forms and also helped clients place cash and valuables in Swiss safety deposit boxes, buy jewelry, artwork and luxury items, and use Swiss credit cards they thought could not be traced by U.S. authorities.