The United States stepped up efforts to crack Swiss bank secrecy codes on Thursday by indicting a banker who moved from UBS AG to another bank and a Zurich lawyer, on charges of helping wealthy Americans hide their assets from U.S. tax authorities.
U.S. officials have tried for years to pierce Switzerland's famed bank secrecy rules and the latest indictment has the potential to ensnare two other Swiss banks, Neue Zuercher Bank where the banker worked and Bank Julius Baer where a UBS client was encouraged to move his account.
U.S. and Swiss officials signed a pact on Wednesday in which details of 4,450 accounts of Americans from banking giant UBS would be turned over as well as a commitment by Switzerland to help uncover Americans' accounts at other Swiss banks.
We encourage foreign banks to come forward and disclose their conduct immediately before we learn about their criminal conduct from U.S. taxpayers, said John DiCicco, the acting head of the Justice Department's tax division.
In a South Florida court, Swiss banker Hansruedi Schumacher and lawyer Matthias Rickenbach were indicted for a conspiracy in which they encouraged Americans to switch accounts from UBS to Neue Zuercher Bank (NZB), a private bank, in a bid to conceal their wealth.
The two allegedly argued that NZB would be better protected from U.S. tax authorities because it did not have operations on American soil, according to the U.S. Justice Department and Internal Revenue Service.
They were also accused of helping their American clients move their money back to the United States in ways that would avoid detection and avoid taxes and counseled clients against coming forward to disclose their accounts to U.S. authorities.
They each face up to five years in prison and a $250,000 fine.
Schumacher worked at UBS from the late 1990s through mid-2002 before moving to NZB, where he worked through at least July 2009. The Justice Department declined to say whether he was still employed by the bank or discuss his current whereabouts.
Attempts to reach the defendants and NZB were not immediately successful.
In the case of Bank Julius Baer, the indictment said that Rickenbach urged an unnamed, unindicted co-conspirator to move his account from UBS to Bank Julius Baer. The indictment does not say whether the individual made the transfer.
The indictment also names them as the two individuals, who said they would use $45,000 from a U.S. client, Jeffrey Chernick, who has pleaded guilty to tax fraud charges, to bribe an unnamed Swiss official so he would know if his account was about to be revealed.
Swiss authorities are investigating the potential bribery angle.
The U.S. Internal Revenue Service has given Americans until September 23 to disclose assets and accounts hidden overseas and avoid criminal prosecution. They still would face significant financial penalties that could wipe out the assets.
Under the agreement signed on Wednesday between Swiss and U.S. officials, Berne has agreed to process other requests by the United States seeking information from banks besides UBS about account holders suspected of evading U.S. taxes.
(Additional reporting by Martin De Sa'Pinto in Zurich. Editing by Sandra Maler and Gerald E. McCormick)