Another Foreign Bank Charged by U.S. Department of Justice

Earlier this week, two Julius Baer Group Ltd. client advisers were charged with helping U.S. customers
of the Zurich- based bank evade taxes, according to an indictment and a person
with knowledge of the matter.

Daniela Casadei and Fabio Frazzetto conspired with more than 180 U.S. clients and
others at the bank to hide at least $600 million in assets from the Internal
Revenue Service, according to the indictment in federal court in New York and
the person, who wasn’t authorized to speak about the matter. The indictment
refers to the bank as Swiss Bank No. 1.

Baer, the Alpine country’s fifth-biggest wealth manager, said it cannot comment on the
indictments or the U.S. government investigation. Casadei and Frazzetto were not
available for comment through a call to the bank, and Martin Somogyi, a Baer
spokesman, declined to put Bloomberg in touch with either.

The charges come amid a U.S. crackdown that includes grand jury investigations of
eight foreign banks. Prosecutors have filed tax charges against three dozen
former U.S. clients of UBS AG and Credit Suisse Group AG, Switzerland’s two
biggest banks, and London-based HSBC Holdings Plc, Europe’s biggest bank. At
least 21 bankers, advisers and attorneys also have been charged.

The charges appear to be just the beginning of numerous expected charges against
various foreign banks stuck in the crackdown. The bank clients are especially
vulnerable to exposure during the crackdown. Our law firm represents many such customers involved with the foreign banks in OVDI and VDP disclosures to avoid future possible complications and prosecution.

The new indictment cites 15 clients, without identifying them, who allegedly used
Casadei or Frazzetto to hide their accounts. About 30,000 U.S. taxpayers have
avoided prosecution since 2009 by voluntarily disclosing offshore accounts to
the IRS. The Justice Department has interviewed many of them in building new
criminal cases.

Baer’s Casadei worked at the bank from the early 1990s through last year, and
Frazzetto worked there from 2005 until last year, according to the new
indictment. Both men, who live in Switzerland, are charged with conspiracy and
face as long as five years in prison.

They opened undeclared accounts for taxpayers under fictional names such as
“Hydrangea” and “Red Rubin”.  Casadei, Frazzetto and others told U.S. clients that their accounts would not be disclosed to the IRS because of the Swiss long tradition of bank secrecy, the bank no longer had offices in the United States, making it less vulnerable to pressure from U.S. law enforcement authorities than other Swiss banks with a presence in the U.S.

Patel Law Offices is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems. Our firm assists (and defends) clients and their advisors to legally disclose (and legitimize) foreign accounts.

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