US Law – Former UBS Client Pays $20.8 Million Penalty for Hiding Over $41 Million in Swiss Bank Accounts

United States Attorney – LawFuel Newswire

PREET BHARARA, the United States Attorney for the
Southern District of New York, announced that JULES ROBBINS, a
former client of the Swiss Bank UBS AG (“UBS”) who owned and
operated watch distribution companies, was sentenced today by
U.S. District Judge RICHARD J. HOLWELL to twelve months of
probation for hiding from the Internal Revenue Service a UBS
account that held nearly $42 million. As part of a plea
agreement, ROBBINS also paid a civil penalty of approximately
$20.8 million.
ROBBINS was one of seven U.S. taxpayers charged in the
Southern District of New York on April 15, 2010, with filing
false tax returns and related crimes for hiding Swiss bank
accounts from the IRS. ROBBINS pled guilty that same day to
filing five false tax returns.
According to the Information to which ROBBINS pled
guilty, other documents filed in Manhattan federal court, and
statements made in court:
Under federal law, when filing Individual Income Tax
Returns, Form 1040, U.S. taxpayers are obligated to report their
worldwide income. Additionally, taxpayers who have a financial
interest in, or signature or other authority over, a financial
account in a foreign country with an aggregate value of more than
$10,000 at any time during a particular year are required to file
with the IRS a Report of Foreign Bank and Financial Accounts
(“FBAR”), as indicated on Schedule B of Form 1040.
From at least 2000 to 2008, UBS helped U.S. taxpayers
conceal their Swiss-based accounts and the income earned in those
accounts from the IRS. UBS and the U.S. taxpayers, assisted by
independent Swiss attorneys and financial advisers, hid these
assets from the IRS by listing sham offshore companies as the
account holders of UBS accounts, when in fact the U.S. taxpayers
actually owned and controlled the accounts. In February 2009,
UBS entered into a deferred prosecution agreement with the United
States, in which the bank admitted to helping U.S. taxpayers hide
accounts from the IRS. As part of this agreement, UBS provided
the U.S. Government with the identities of, and account
information for, certain U.S. customers of UBS’s U.S. crossborder
banking business.
In 2000, ROBBINS used the services of a U.S.-educated
Swiss attorney to set up a sham Hong Kong corporation which was
listed as the holder of his account and to serve as the nominal
head of the corporation. In fact, UBS internal documents
specified that ROBBINS wanted to be “100% in charge” of
investment decisions concerning his UBS accounts. ROBBINS also
took numerous steps to conceal his interest in these accounts
from the IRS, including having his Swiss attorney receive all of
the correspondence relating to the account at his law firm in
Switzerland. As of December 31, 2007, ROBBINS’ UBS accounts
collectively contained almost $42 million.
* * *
ROBBINS, 84, of Jericho, New York, pled guilty on April
15, 2010, to five counts of subscribing to false federal income
tax returns. As part of his plea agreement with the Government,
ROBBINS paid a civil FBAR penalty of $20,833,345, an amount equal
to 50 percent of the highest value of his UBS accounts as of
December 31 for the years in which he failed to file FBARs.
Mr. BHARARA praised the work of the IRS and thanked the
U.S. Department of Justice’s Tax Division and the New York County
District Attorney’s Office for their significant assistance. He
added that the investigation is continuing.
This case is being handled by the Office’s Complex
Frauds Unit. Assistant U.S. Attorneys DAVID B. MASSEY and E.
DANYA PERRY are in charge of the prosecution.
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