Tags: Julius | Baer | Bankers | Tax

Julius Baer Bankers Charged in US Tax Probe

Wednesday, 12 Oct 2011 10:53 AM

 

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U.S. prosecutors indicted two private bankers with Julius Baer for helping wealthy Americans evade taxes, drawing yet another Swiss bank into the crosshairs of the U.S. Justice Department amid a widening crackdown on offshore tax evasion.

While the indictment of the two bankers, Daniela Casadei and Fabio Frazzetto, did not name their employer and referred only to "Swiss Bank #1," Julius Baer confirmed the indictment concerned one current and one former employee.

"The bank is one of a number of Swiss financial institutions supporting the ongoing negotiations between the U.S. and Switzerland and is cooperating with the US government investigation," Julius Baer said in a statement.

"The bank cannot comment on the indictments ... (and) cannot comment further on the US government investigation," Baer said.

The two bankers and a number of unnamed colleagues helped about 180 rich American clients of Julius Baer hide about $600 million in secret Swiss bank accounts that went undeclared to the U.S. Internal Revenue Service, according to the indictment.

Casadei and Frazzetto were accused of conspiracy to defraud the United States. According to court papers, Casadei worked at Julius Baer's Zurich office from at least the early 1990s and Frazzetto worked at the Zurich office from around 2005.

The charges against the two bankers come as the U.S. Justice Department turns up the heat on Swiss banks that help wealthy American clients evade taxes.

Larger rival Credit Suisse Group AG received a target letter, a step toward possible indictment, in July, and about a dozen other banks are under criminal scrutiny. Scores of bankers and clients have been indicted over the past year or so.

In 2009 UBS AG agreed to pay $780 million and turn over around 4,450 client names to close a protracted tax dispute with U.S. authorities.

The Baer indictment accused Casadei and Frazzetto of helping American clients open Swiss accounts in code names, encouraging them to put assets in the names of foreign relatives, setting up sham entities to hide their clients' ownership of the assets, and reassuring clients that they would not be found out because the bank no longer had an office in New York.

The indictment also referred to two unnamed client advisers — a term for private bankers — at the bank and to a second Swiss bank, identified only as "Swiss Bank #2."

One unnamed client adviser told an American client to transfer her funds from Julius Baer to the second Swiss bank and to use obscuring names such as "the Green-White House Account," to hide her ownership of both bank accounts, according to court papers.

According to the prosecutors, Casadei told the American client that because the bank "no longer had a presence in the United States," it was immune from the criminal investigation of UBS by the U.S. Justice Department.

© 2014 Thomson/Reuters. All rights reserved.

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