Trial begins for ex-UBS banker in tax evasion case

AP News
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Posted: Oct 14, 2014 5:35 PM

FORT LAUDERDALE, Fla. (AP) — Trial began Tuesday for a former top executive at Swiss banking giant UBS AG on charges of conspiring with other bankers and thousands of wealthy Americans to conceal $20 billion in assets from the IRS.

Raoul Weil, who once ran the global wealth management operations for UBS, faces up to five years in prison if convicted of conspiracy to defraud the U.S. government. Prosecutors say he oversaw a lucrative, illegal business in the U.S. that recruited the wealthy to hide money behind opaque Swiss bank secrecy laws and using phony companies, foundations and other entities.

"You had to have a plan, and it was a plan to defraud the IRS. And the defendant was in on that plan," said Mark Daly, a Justice Department tax division trial attorney, in an opening statement. "Whether you're at the bottom or the top, you're still in on that conspiracy."

Daly described elaborate efforts by UBS bankers to conceal who they worked for and what they were doing on trips to the U.S., such as using laptop computers with hidden hard drives that contained secret client information and frequently switching hotels. The bankers lured rich clients at such South Florida events as the Art Basel sales and the annual Key Biscayne tennis tournament, he said.

"Why did these taxpayers put their money in Switzerland? Swiss bank secrecy is the reason," Daly said.

Weil attorney Aaron Marcu, however, blamed any wrongdoing on a small group of rogue UBS bankers who did not keep their boss informed. Many of them, he told jurors, made immunity deals with the government in exchange for their testimony against Weil.

"They broke the law. They violated their duty to the bank and Mr. Weil. They lied to Mr. Weil," Marco said. "The government is going to try to pin this misconduct on one man: Raoul Weil."

Weil, 54, was originally indicted in 2008 and was a fugitive until his 2013 arrest in Italy. Weil pleaded not guilty after his extradition to the U.S. and has been free on $10.5 million bail.

The trial, expected to last about four weeks, is the latest in a campaign by the IRS to pry open Swiss banks and identify U.S. taxpayers using them to dodge income taxes.

In 2009, UBS paid a $780 million fine and agreed to turn over names of thousands of customers suspected of evading U.S. taxes. Many have since been prosecuted and others agreed to pay back taxes, penalties and fines under a voluntary IRS amnesty program.

Other UBS bankers have also been charged in the case, but Weil is by far the highest-ranking to go to trial. Before he left UBS in 2009, Marcu said he was its third-ranking executive and oversaw $2.1 trillion in the wealth management business for the Zurich-based bank.

"Mr. Weil had responsibilities all over the world," Marcu said.

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