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Weil Case: What Was The Swiss Role?



If you poke about under rocks for long enough, you’d better be prepared to find something unpleasant. That’s what the US government is realizing as the Raoul Weil case finally goes to court. Weil, 54, is accused of helping US citizens avoid taxes while working as head of Global Wealth Management at Switzerland’s UBS – and some of the stories emerging are as bizarre as the numbers are huge.

Raoul Weil, left, arrives with his wife, Susan Lerch Weil, for the start of his trial at federal court on Tuesday in Fort Lauderdale.

US Clients

It’s thought that UBS’s clients included around 20,000 US citizens, among them, almost by definition, some of the wealthiest in the country. Weil’s arm of the Swiss finance house controlled perhaps £20 billion, managing to shield it from the ever-watchful eyes of the IRS – at least until 2009, when, following revelations by former employee Brad Birkenfeld, UBS declared it would cease offering cross-border services to US clients, and paid a fine of $780 million.

Fugitive

Following Birkenfeld’s statements, made after his arrest on charges of assisting one of his clients to evade tax, Weil stepped down from UBS, and was declared a “fugitive” in January 2009. The word suggests Weil was on the run, though in reality he simply didn’t travel to the US, knowing he would be arrested. He remained a fugitive until a year ago, when he was arrested in Bologna, Italy, and the process of extradition to the US began.

Deal?

Weil noticeably decided not to contest the extradition proceedings, making it look likely that some kind of deal had been arranged with the Department Of Justice; inside information about the wealthy US clients involved may well turn out to be Weil’s ace in the hole. His defense team claims that any wrongdoing was perpetrated by those beneath him and that he knew nothing about it.

Secrets

As the trial in Florida gets under way, some fascinating stories revealing the murky, secretive world of Swiss banking have begun to emerge. Hansruedi Schumacher, a prosecution witness who ran UBS’s North American section until twelve years ago, told the court this week that use of a secret Swiss account enabled US clients to keep hold of 100% of any stock market gains, rather than paying 30% to the IRS.

Tourist Visas

Clients would pay UBS for the privilege of not having statements sent to them, and not receiving phone calls – calls that might later be traced by the authorities. It’s claimed that UBS bankers would travel to the US to meet clients on tourist visas, handing out business cards with no UBS logo – just a name and a phone number.

Anonymity

At the time all this was going on, Swiss banking law was extremely protective of client anonymity. Anyone who revealed details of client accounts could be jailed, and UBS initially argued that the Department of Justice was attempting to force it to break Swiss law by revealing US client information. Eventually, the Swiss government felt it had no choice but to rubber-stamp a plan to allow information about these clients to be passed to the US authorities.

In 2009, an emergency cabinet meeting was held in Bern, at which time it was agreed to save UBS by revealing the names of some suspected US tax evaders. In June 2010, having considered holding a referendum, the Swiss Parliament agreed to hand the Department of Justice the details of 4,450 UBS accounts held by US citizens. The New York Times called it “a watershed moment in the history of Swiss private banking”.

Jail

If Raoul Weil is convicted, he faces a jail term of up to 5 years and a fine of up to $250,000. If he does know where the bodies are buried – and those bodies turn out to be embarrassingly well-known names as far as the US government is concerned – things may turn out very differently. Brad Birkenfeld was in prison in August 2012; a month later he’d been awarded $104 million by the IRS Whistleblower Office.

As a former public defender, Michael has defended the poor, the forgotten, and the damned against a gov. that has seemingly unlimited resources to investigate and prosecute crimes. He has spent the last six years cutting his teeth on some of the most serious felony cases, obtaining favorable results for his clients. He knows what it’s like to go toe to toe with the government. In an adversarial environment that is akin to trench warfare, Michael has developed a reputation as a fearless litigator.

Michael graduated from the Thomas M. Cooley Law School. He then earned his LLM in International Tax. Michael’s unique background in tax law puts him into an elite category of criminal defense attorneys who specialize in criminal tax defense. His extensive trial experience and solid grounding in all major areas of taxation make him uniquely qualified to handle any white-collar case.

   

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