The former banker is Renzo Gadola, who was recorded telling a client not to tell the US Internal Revenue Service about his undeclared offshore account in Basler Kantonalbank, another Swiss bank, according to reports of the case.
The client is said to have told Gadola and another, unidentified, Swiss banker that he wanted to declare the money under an IRS voluntary disclosure programme but had been advised not to because the amount involed — $445,000 – was too small.
Gadola, who worked for UBS from 1995 until August 2008, was arrested in November in Miami and originally pleaded not guilty to the charges, faces up to five years in prison, media reports said.
Gadola entered his guilty plea in Federal District Court in Miami. He is free on bail, pending sentencing in March.
Since 2008
As previously reported by International Adviser, the US has been pursuing Zurich-based banking giant UBS for years, and in 2008 formally accused the bank of helping wealthy Americans to evade taxes through the use of offshore accounts. The case has been noteworthy for the determination of the American authorities to obtain the names of UBS’s clients, and to collect millions of dollars in fines from the bank.
Under Swiss law, banks must not divulge the names of their clients. However, they are also not permitted to assist or be aware of any criminal wrong-doing, including tax evasion.
In an analysis of the Gadola prosecution and another case involving tax evasion by a wealthy American with a UBS account in Switzerland, Asher Rubenstein of Rubenstein & Rubenstein, a New York law firm, noted that a number of lessons could be learned, including the “vulnerability of non-compliant offshore accounts to discovery”.
“Moreover, they show that the IRS is aware of the tactics and methods used by taxpayers, and their advisers, to avoid detection,” Rubenstein noted.
Other takeaways of the case, according to Rubenstein, include the fact that the IRS evidently “does not want taxpayers to believe that an account under a certain size is ‘safe’ from discovery,” and that it is “not only investigating and prosecuting the owners of the undeclared foreign accounts [but is] also targeting people who facilited and assisted in the non-compliance”.
