August 18, 2009
By David Voreacos and Carlyn Kolker Aug. 18 (Bloomberg) — More than 150 UBS AG clients in the U.S. are under investigation for concealing income and assets offshore at the bank, a prosecutor said in a court filing. The scope of the investigation was disclosed today in a memo recommending that former UBS AG banker Bradley Birkenfeld serve 30 months in prison for conspiring to help wealthy Americans evade taxes. Birkenfeld will be sentenced Aug. 21 in Fort Lauderdale, Florida. Birkenfeld, 44, pleaded guilty in June 2008 to conspiracy, admitting he helped U.S. clients evade taxes through Zurich- based UBS. He seeks leniency for helping in the worldwide tax- fraud probe. UBS agreed Feb. 18 to pay $780 million to avoid prosecution for helping wealthy Americans evade taxes. The bank gave the names of 250 clients to the U.S. Internal Revenue Service. “Ultimately, based upon information obtained from UBS as part of the deferred-prosecution agreement, the United States is criminally investigating more than 150 Americans across the country who are believed to have concealed income and assets at UBS, in violation of United States law,†acting U.S. Attorney Jeffrey Sloman said in the filing. Three UBS clients pleaded guilty since the agreement to filing false tax returns, and a fourth was charged last week with failing to file a tax report for an offshore account. ‘Substantial Assistance’ “Birkenfeld has provided substantial assistance in the investigation and prosecution of others who have committed offenses,†Sloman wrote. “This substantial assistance has been timely, significant, useful, truthful, complete, and reliable.†On Feb. 19, the IRS sued UBS in federal court in Miami, seeking the names of Americans suspected of evading taxes through 52,000 secret Swiss accounts. Birkenfeld has been under house arrest with electronic monitoring near Boston. His lawyer, David Meier, didn’t immediately return a call seeking comment. Birkenfeld was a banker for California billionaire Igor Olenicoff , who pleaded guilty in December 2007 to filing a false tax return that failed to declare accounts at UBS, where he once had $200 million in assets. Olenicoff got two years’ probation and paid $52 million in back taxes, interest and penalties. In April 2008, Birkenfeld and Liechtenstein investment adviser Mario Staggl were charged with helping Olenicoff and others evade taxes. Staggl is a fugitive. $200 Million Yearly Birkenfeld said when he pleaded guilty that UBS earned $200 million a year by managing $20 billion in assets and setting up sham entities for clients in tax havens like Panama and the British Virgin Islands. Birkenfeld, a neurosurgeon’s son who worked in Switzerland for three international banks, told prosecutors and U.S. Senate investigators how UBS courted clients like Olenicoff. In pleading guilty, Birkenfeld said as many as 60 UBS private bankers trolled for clients at UBS-sponsored art shows, yachting regattas and golf and tennis tournaments. He said he toted customer checks to deposit in European banks and bought diamonds for one client, smuggling them to the U.S. in a toothpaste tube. The case is U.S. v. Birkenfeld, 08-cr-60099, U.S. District Court, Southern District of Florida (Fort Lauderdale). To contact the reporters on this story: David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net ; Carlyn Kolker in New York at ckolker@bloomberg.net .
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August 16, 2009
By Dan Hart Aug. 16 (Bloomberg) — A tropical storm warning was issued for the coastal communities of the Florida panhandle and the northeastern Gulf of Mexico as a tropical depression formed late yesterday, the U.S. National Hurricane Center said. Tropical storms Ana and Bill, which both consolidated yesterday, are slowly moving west in the Atlantic, the center said. Tropical depression No. 4, with maximum sustained winds of about 35 miles (56 kilometers) per hour, was about 125 miles south-southwest of Apalachicola, Florida, as of 8 a.m. local time, the center said in a statement. The system is crawling north-northeast at about 16 mph, and is expected to become a tropical storm later this evening, making landfall on the coast of the Florida panhandle, the center said. Ana, the first named storm of the 2009 Atlantic hurricane season, is moving west at about 20 mph, the center said. The storm had maximum sustained winds of about 40 miles per hour as of 8 a.m. New York time and is about 470 miles to the east- southeast of the Leeward Islands , where the Caribbean Sea meets the western Atlantic. The storm’s center should reach the Leeward Islands by early tomorrow, and it is expected to veer north-northwest within the next 24 hours, the hurricane center said. Tropical Storm Bill, which formed late yesterday, strengthened overnight to have maximum sustained winds of 45 mph, the center said in its latest advisory. Bill is moving west about 13 mph, and may turn toward the northwest during the next 24 to 48 hours. Bill Gains Strength Bill is about 1,640 miles to the east of the Lesser Antilles, which include the U.S. Virgin and British Virgin Islands, Martinique , St. Lucia , St. Vincent and the Grenadines. A storm is named once it has sustained winds of 39 mph or greater, and it becomes a hurricane when winds strengthen to 74 mph. The Atlantic hurricane season lasts from June 1 to Nov. 30. In the Pacific, Hurricane Guillermo weakened overnight to maximum sustained winds of about 100 mph, from 125 mph yesterday, as of 2 a.m. New York time. The storm is moving west at about 15 mph, and is expected to weaken to a tropical storm during the next 24 to 48 hours, the center said. To contact the reporter on this story: Dan Hart in Washington at dahart@bloomberg.net .
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