The Government has charged yet another UBS related person. The story in a nutshell is that Samuel Phineas Upham, who, I am told, is the son of Sybil Nancy Upham, previously indicted (although named in this' indictment as "Family Member A"), assisted Family Member A with respect to her accounts, held through entities, by actively engaging in the cover up of those accounts and the proceeds from the accounts, even after the hammer had fallen on UBS. I use Mr. Upham in this blog entry to distinguish him from his mother. His mother's indictment is here. Further, Mr. Upham assisted Family Member A in the preparation of false returns. The charges are: (1) the ubiquitous Klein conspiracy count (Count One) and (2) aiding and assisting, Section 7206(2) for three years (2005 - 2007) (Counts Two through Four). The indictment is here.
Just a few points that I noted in reviewing the indictment (some points are redundant in part to the summary in the above paragraph, and I note that these are just allegations in the complaint and have not yet been proved):
1. The co-conspirators named in Count One are (i) Family Member A and (ii) Swiss Financial Adviser A. Swiss Financial Adviser A's background and general role in the conspiracy are described in paragraph 6.b. of the indictment. My guess is that Swiss Financial Adviser A will not come into the U.S. voluntarily anytime soon.
2. The Conspiracy Count allegations elaborate efforts to cover up, even after the hammer had fallen on UBS.
3. Sham entities were used -- a Lichtenstein Foundation and a Hong Kong corporation.
4. Mr. Upham assisted in making large cash withdrawals and transporting the cash into the United States without submitting FINCEN Form 105 (Currency Transportation). And, in one instance, he actually completed a Customs Declaration Form falsely certifying that he was not importing cash in excess of $10,000.
5. Some of the cash was deposited into a United States bank account "multiple night deposits of cash totaling approximately $20,000 were made into accounts controlled by Family Member A."
6. In response to the U.S. actions against UBS in May 2008, Mr. Upham and Family Member A began worrying about how they could maintain their secrecy and began moving money into a Lichtenstein Bank (Lichtenstein Bank A) with the account in the name of a sham corporation in Lichtenstein. "Unlike UBS, Liechtenstein Bank A does not have offices in the United States." The amount moved aggregated $8,554,598.
7. Mr. Upham prepared false returns for Family Member A. In one year, Family Member A submitted the return without signing it. Mr. Upham both prepared the returns and counseled, advised, etc., Family Member A as to the returns and reporting.
8. The tax returns for the charged years did not include the income and thus did not report the tax liability and the returns falsely answered no to the Schedule B foreign financial account question.
9. Mr. Upham was arrested. I have not tried to sift through the charged cases to see if this is a pattern for charges where the plea is not agreed to at the time of filing or only in cases where there may be some concern about the defendant fleeing the U.S.
10. There is another instance where family members were indicted -- Harry Abrahamsen and Lucille Abrahamsen Jackson.
I have updated the spreadsheet with the information I could glean from the indictment.
Here are some links to articles:
New York Times
New York Observer
Addendum: The foregoing discussion was updated on 12/9/10 around 2:00 pm to reflect that Mr. Upham is the son and not Family Member A and to provide a link to the indictment of the person who is apparently Family Member A.
Request to Readers: I am told that Sybil Nancy Upham pled guilty on 11/10/2010, and agreed to some type of $5.5 MM payment which, I presume, is the FBAR penalty at 50%. I would appreciate receiving a copy of the plea agreement and any other documents related to the plea (including the transcript) from any reader willing to share them. Please email anything in this regard to me at email@example.com. Please state in the email whether the documents and / or information is for my eyes only or whether, after I strip of any identification of the provider, I can post it on this blog. Thanks.