MANHATTAN (CN) - Federal prosecutors accuse a New York attorney and a client adviser at a Swiss bank of conspiring to help clients duck taxes on millions of dollars.
The U.S. attorney sued Edgar Paltzer, an attorney, and Stefan Buck, an adviser at an unidentified Swiss bank, in a 41-page indictment that cites six clients.
Paltzer is a member of the bar in New York and Switzerland, according to the indictment. He began working for a Zurich law firm in 1998 and now is a partner there.
Buck is a citizen and resident of Switzerland. He began working for "Swiss Bank No. 1" in 2007. The bank, which had about 2 billion Swiss francs ($2.1 billion) under management on Sept. 30, 2012, does not have a branch in the United States.
Bank No. 1 apparently gained a slew of clients after the United States cut a deferred prosecution agreement with UBS bank.
The indictment states: "In or about February 2009, UBS AG ('UBS'), another Swiss bank that provided private banking services to U.S. taxpayers, entered into a deferred prosecution agreement with the Department of Justice and admitted that it had participated in a scheme to defraud the Internal Revenue Service (the 'IRS'). In or about February 2012, Wegelin & Co. ('Wegelin'), another Swiss bank that provided private banking services to U.S. taxpayers, was indicted by a grand jury sitting in the Southern District of New York for conspiring with U.S. taxpayers to defraud the IRS, to evade taxes, and to file false tax returns with the IRS. Between approximately February 2009 and February 2012, the number of Swiss Bank No. 1 clients who were U.S. taxpayers grew by approximately 300 percent.
"At all times relevant to this Indictment, the vice chairman of the board of directors of Swiss Bank No. 1 was one of the managing partners of Wegelin. Wegelin provided
various back-office services to Swiss Bank No. 1, including permitting Swiss Bank No. 1 to have checks to Swiss Bank No. 1's clients issued from Wegelin's correspondent bank account in the United States. This permitted, among other things, Swiss Bank No. 1 to assist U.S. taxpayer clients in repatriating undeclared
funds held at Swiss Bank No. 1 to the United States."
The conspiracy indictment states: "From at least in or about 2000 through in or about at least 2012, Edgar Paltzer and Stefan Buck, the defendants, conspired with various U.S. taxpayers, and others known and unknown, to ensure that their U.S. taxpayer clients could hide the U.S. taxpayers' Swiss bank .accounts, and the income generated in those accounts, from the taxation authority of the United States, the Internal Revenue Service (the 'IRS'), via false and fraudulent federal income tax returns."
The indictment cites emails and correspondence indicating that the defendants used codes to help their clients duck taxes and repatriate money to the United States, and were paid well for it.
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