'There's You, & US. UBS. We'll Even Smuggle Diamonds In A Toothpaste Tube For You'

Discussion in 'Wall St. News' started by ByLoSellHi, Jun 19, 2008.

  1. http://www.bloomberg.com/apps/news?pid=20601087&sid=aLSAtQJlo7hE&refer=home

    UBS Helped Clients Hide $20 Billion, Birkenfeld Says (Update1)

    By David Voreacos and Carlyn Kolker

    June 19 (Bloomberg) --
    The private banking unit of UBS AG, the Swiss bank, engaged in a variety of schemes to help wealthy U.S. clients conceal $20 billion in assets and evade income tax laws, an ex-banker said today in pleading guilty to conspiracy.

    Bradley Birkenfeld, 43, and his UBS colleagues helped wealthy Americans hide money by telling them to put cash and jewelry in Swiss safety deposit boxes, buy artwork and jewels using offshore accounts, and set up accounts in the names of others, he admitted in federal court in Fort Lauderdale, Florida.

    Birkenfeld is helping a Justice Department probe of Zurich- based UBS, and said the practices he described are common among his former colleagues. Birkenfeld said UBS helped wealthy Americans evade taxes even after signing a 2001 agreement that required it to identify account holders and their income to U.S. tax authorities. He said many clients refused to disclose their assets because it would defeat the purpose of banking with UBS - - evading taxes.

    ``Rather than risk losing the approximately $20 billion of assets under management in the United States undeclared business,'' UBS ``assisted these wealthy U.S. clients in concealing their ownership of the assets held offshore,'' Birkenfeld said in a written statement accompanying his plea.

    UBS earned about $200 million a year in revenue by helping high-income clients through such practices as setting up sham entities in tax havens including Switzerland, Panama, British Virgin Islands, Hong Kong and Liechtenstein, Birkenfeld said.

    In one case, Birkenfeld even agreed to buy diamonds for a U.S. client using Swiss funds and ``smuggled the diamonds into the United States in a toothpaste tube,'' Birkenfeld said.

    U.S. Investigations

    UBS spokesman Mark Arena declined to comment on the plea. He said UBS is cooperating in a Justice Department investigation of whether the bank helped U.S. clients evade taxes from 2000 to 2007, and a Securities and Exchange Commission probe of whether it failed to register as a broker-dealer or investment adviser.

    ``UBS is treating these investigations with the utmost seriousness and will appropriately and responsibly address and correct any issues raised in the investigations, including taking appropriate disciplinary action,'' Arena said in an e- mailed statement.

    Birkenfeld's admission may help prosecutors as they continue to probe UBS bankers and their clients. Birkenfeld's cooperation will assist the Justice Department ``nationwide'' in its investigation, federal prosecutor Kevin Downing said today.

    Conspired with Billionaire

    Birkenfeld pleaded guilty to conspiring with his biggest client, California billionaire Igor Olenicoff, to help him evade $7.2 million in income taxes. Birkenfeld admitted that he helped Olenicoff hide $200 million in assets through Bahamian corporations, Liechtenstein trusts and Danish corporations.

    Olenicoff, a real estate developer and chief executive officer of Olen Properties Corp., pleaded guilty Dec. 12 to filing a false income tax return. He was sentenced to two years' probation and agreed to pay $52 million in back taxes, interest and penalties.

    Birkenfeld said he conspired with Liechtenstein banker Mario Staggl, 43, who was indicted with him on April 10. Staggl is considered a fugitive.

    In his plea statement, Birkenfeld said a UBS manager assured him that the bank was committed to assisting wealthy clients despite signing the 2001 accord known as a Qualified Intermediary agreement.

    Encouraged by Superiors

    Birkenfeld, a U.S. citizen who lived for the last 13 years in Switzerland, said his superiors encouraged him to travel to the U.S. to solicit new clients. UBS, which sponsored an art show and a tennis tournament in Miami, trained bankers to avoid detection by U.S. law enforcement by stating falsely on customs forms they were traveling on pleasure, not business, he said.

    The UBS bankers ``knew that they were not licensed to provide banking services, offer investment advice or solicit the purchase or sale of securities through contact with clients in the United States,'' according to Birkenfeld's statement.

    Birkenfeld faces as much as five years in prison. He is free on a $2 million bond secured by his father, a neurosurgeon, and a brother, who is a lawyer. He also must wear an electronic monitoring device and remain at his brother's home in Boston under house arrest.

    The case is U.S. v. Birkenfeld, 08-cr-60099, U.S. District Court, Southern District of Florida (Fort Lauderdale).
  2. Tell me how these assholes keep a license. If it were me as an RR, they'd hang me from a bridge.

    What type of people think this type of behavior is acceptable? If it wasn't for 9/11, they'd still be doing it. It seems the investigations began in earnest looking for terrorism funding.

    You have to wonder who was paid off. After the Twin Towers, even that wasn't possible anymore. But how does the IRS overlook this kind of dough? Wouldn't you flag a billionaire if suddenly his tax liabilities took a dive, but he was living better?
  3. LOL, ByLoSellHi,

    You always deliver. :p

    Thank you for your continued efforts to bring to light the real business activities of these bottom dwelling scum suckers.
  4. Can you believe their arrogance, guys?

    Does it know no bounds?

    I'm not a saint, and I try not to be a hypocrite. I try to keep improving and not to judge too harshly.

    But I can honestly say that we are sharing this earth with some of the most narcissistic assholes ever known to G_d or man.
  5. You realize this is like a cat and a ball of string. They did this, all of them, because they could get away with it. Why were they arrogant? Why did they show no fear? Because they owned the cops. The most banal out there fear repercussion. These guys didn't.

    This is going to bring down huge names. they left nothing for anybody else. Chris Dodd can't help them anymore.
  6. UBS also told investors to stick it if they wanted to liquidate their auction rate securities. I had some money in these products at Merrill and they were honest enough to get me out at par.

    <thoughtful, caring voice:>

    "UBS. Possibly the most important two-person financial team. Well, as long as you don't need your own fucking money."

  7. S2007S


    Did cnbc run this story yet???
  8. RhinoGG

    RhinoGG Guest

    I hope Birkenfeld does not give up his client list. My wife will be pissed if she has to give up those stones!
  9. They live in a real world. Something for you to think about.
  10. Absolutely no doubt!!

    In 2008, I think there are more horses asses running loose than horses to claim them.

    Makes my job harder by the second too.:mad:
    #10     Jun 20, 2008