An 83-year-old man has been sentenced to three months of house arrest after pleading guilty to using Swiss bank accounts to hide $5.7 million from US tax authorities.

Jacques Wajsfelner admitted failing to file Foreign Bank and Financial Accounts Reports, evading over $419,000 in tax. He was sentenced to six months of supervised release, including the period of house arrest. He will also pay back taxes of $419,940 and a fine of $20,000. He previously agreed to pay a civil penalty of over $2.8 million to resolve the criminal charges against him.

His lawyer, Jeffrey Denner, is quoted in Bloomberg as having said that Wajsfelner used Swiss accounts as a result of post-traumatic disorder, after having lived under the Nazi regime, which he fled as a teenager.

“This was as a result of his overriding irrational fear, that this is going to happen again,” Denner told US District Judge Naomi Reice Buchwald before the sentencing, the news service said. “When he was a child, the Germans took their money and they lost everything. He thought that this was an insurance policy. It wasn’t rational.”

The Wegelin affair

Wajsfelner held accounts at Credit Suisse and Wegelin, which was sentenced on Monday for conspiring to evade taxes, file false tax returns and defraud the IRS in the Southern District of New York. Wegelin, the oldest Swiss bank, was ordered to pay approximately $58 million to the US for conspiring with US taxpayers and others to hide approximately $1.5 billion in secret Swiss bank accounts.

Wegelin has been accused of capitalising on US investigations in 2008-2009 into other Swiss banks, and particularly UBS, by highlighting to US taxpayers that it did not have offices in the US, which it believed made it less vulnerable to US law enforcement.

UBS entered into a deferred prosecution with the Justice Department in 2009 on charges of conspiring to defraud the US, as part of which it paid $780 million in fines, penalties, interest and restitution.

According to a statement from the US Attorney for the Southern District of New York, it was in the autumn of 2008, when Credit Suisse began the process of exiting its US cross-border banking business, that Wajsfelner opened an undeclared account at Wegelin.

Wajsfelner also used the services of Beda Singenberger, a Swiss financial advisor who was charged in July 2011 with conspiring with US taxpayers and others to hide more than $184 million offshore at various Swiss banks. The case against Singenberger is pending.