Ex-UBS banker gets 5 years' probation in tax case

AP News
Posted: Nov 18, 2011 11:58 AM
Ex-UBS banker gets 5 years' probation in tax case

A former banker at Swiss giant UBS AG was sentenced Friday to five years' probation and no jail time for tax fraud as a reward for helping U.S. prosecutors build other tax evasion cases.

Senior U.S. District Judge James Lawrence King agreed that 45-year-old Renzo Gadola deserved leniency for his cooperation, which has led to charges against two former colleagues and at least one banking client.

"You cooperated fully and the results have been extraordinary," King said at a hearing.

Gadola, who worked at UBS from 1995 to 2008 and later started his own business, had potentially faced at least 10 months in prison after pleading guilty to tax fraud conspiracy in 2010. Prosecutors suggested a sentence of five months behind bars, but they also did not oppose the probation term that was handed down.

"He went through client by client, colleague by colleague," said Mark Daly, a trial attorney with the U.S. Justice Department's tax division. "It has been extremely helpful."

Gadola is the latest of nearly two dozen bankers and advisers at UBS and other banks charged in the U.S. with helping wealthy clients hide assets in Swiss accounts and dodge taxes. The Internal Revenue Service crackdown that began in 2009 has also led thousands of taxpayers to disclose their accounts under a voluntary program in which they avoided prosecution but still had to pay taxes and penalties.

Zurich-based UBS itself avoided prosecution in the U.S. by agreeing in 2009 to turn over accounts of more than 4,500 customers and paying a $780 million fine.

Gadola's assistance to prosecutors included taking part in recorded phone calls with bank customers and providing details about the inner workings of UBS. His disclosures led to federal charges against two former colleagues, Martin Lack and Christos Bagios, as well as at least one client in a case that remains sealed, Daly said.

Lack is a fugitive believed to be living in Switzerland. Bagios is awaiting trial in Fort Lauderdale federal court on tax fraud conspiracy charges and has not yet entered a plea.

Under terms of his probation, Gadola will be permitted to live in Switzerland but must return to the U.S. once a year to continue assisting prosecutors in other tax cases. If Bagios goes to trial, Gadola is expected to be a witness.

Gadola's attorney, Peter Raben, said his client had already proven his trustworthiness by traveling from Switzerland for his sentencing hearing Friday. Raben said Gadola had to talk his way past customs officials at Miami International Airport, who initially refused him entry because his visa had expired.

"He passed that test," Raben said.


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