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Former UBS Client Pleads Guilty To Not Reporting More Than $11 Million To IRS

Tom Burroughes

31 May 2012

A former client ofUBS, Wolfgang Roessel, has pleaded guilty for failing to report more than $11 million in Swiss accounts to the US Internal Revenue Service.

The 72-year-old man admitted in a US District Court in Florida that he failed to report bank accounts held at UBS in Switzerland on his 2002 through 2007 personal income tax returns, according to court documents. He also failed to file Reports of Foreign Bank and Financial Accounts, or FBARs, for the same years.

He has agreed to pay a civil FBAR penalty of $5.75 million as well as taxes due of $312,803. He also faces a potential maximum prison term of three years and a fine of up to $250,000.

Roessel is helping prosecutors in a crackdown on offshore tax evasion, according to Bloomberg. So far, US prosecutors have charged almost 50 US taxpayers with tax crimes since 2009.

In that year, UBS settled criminal and civil charges with the US authorities by paying $780 million and transferring names of up to 4,450 US clients to the US authorities, a move that was seen at the time as a significant breach of Swiss bank secrecy law. The US, along with a number of other countries, has attempted to hunt down alleged tax evaders in a bid to plug massive shortfalls in national budgets. The pressure on Switzerland is significant as the Alpine state generates about 12 per cent of its gross domestic product from banking and financial services.

Roessel ran a company that made cameras, and he holds several patents, said his lawyer, Lee Stapleton, after he appeared in court on April 10. Roessel, a naturalised US citizen born in Germany, was charged 3 April.

Court records also said that Roessel deposited foreign proceeds from his business into accounts at Wegelin & Co and another Swiss bank not identified in a statement by the US Justice Department. Wegelin, Switzerland’s oldest private bank, was indicted in New York on 2 February and became the first Swiss institution charged in the offshore crackdown.

“In 2008 and 2009, during which period the defendant was aware of the government’s grand jury investigation into his foreign UBS accounts, the defendant disclosed only the existence of the UBS accounts on his tax returns for those years and did not report the other Swiss account,” the Department of Justice said in a statement.