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Ex-Julius Baer bankers to plead guilty in US in Swiss tax case

Friday, February 5, 2016 - 00:20

[NEW YORK] Two former private bankers at Julius Baer are expected to plead guilty Thursday to charges that they helped wealthy American clients evade taxes, as the Swiss bank prepares to resolve a criminal investigation with a US$547 million settlement.

The expected pleas by Daniela Casadei and Fabio Frazzetto, both former client advisers at Julius Baer, in federal court in Manhattan come two days after the Swiss citizens arrived in the United States to face the charges.

Both are expected to appear in court again later Thursday, the office of Manhattan US Attorney Preet Bharara said in an advisory, using language typically indicative of a guilty plea.

Their prospective pleas came after Julius Baer in December disclosed that it had reached a deal with prosecutors to pay US$547.25 million to resolve a probe born out of a US crackdown on offshore tax evasion by Americans through Swiss banks.

Casadei, 52, and Frazzetto, 42 were indicted in 2011 for conspiring to help US taxpayers hide more than US$600 million in offshore accounts and evade paying taxes.

Both would normally beyond the reach of US extradition, as Switzerland does not extradite its own citizens.

Their lawyers did not respond immediately to requests for comment Thursday. Julius Baer declined comment.

The US tax evasion crackdown has already resulted in charges against a number of bankers, lawyers and advisers and billions of dollars in settlements with Swiss banks.

The US Justice Department last week announced the final settlement in a program that resulted in deals with 80 banks for US$1.36 billion to avoid possible prosecution.

Banks that were already under criminal investigation like Julius Baer, though, were not eligible for the program, which required the banks to provide detailed information on the accounts of US taxpayers under investigation.

In 2014, Swiss banking giant Credit Suisse pleaded guilty to conspiring to aid and assist US taxpayers in filing false tax returns in a US$2.6 billion settlement.

The penalty was more severe than the US$780 million that rival UBS AG agreed to pay in 2009 as part of a deferred prosecution deal.

Wegelin & Co, which had been the oldest Swiss private bank, was meanwhile forced to close after agreeing in 2013 to plead guilty to conspiracy to evade taxes and pay US$74 million.

The case is US v. Casadei, US District Court, Southern District of New York, No. 11-cr-00866.

REUTERS

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