Thursday, August 4, 2011

Class Action Suit by U.S. Depositors in UBS (8/4/11)

A class action suit has been filed against UBS in the North District of Illinois. The complaint is here. The class of plaintiffs includes certain U.S. depositors in UBS who held account(s) from 2002 - 2008 and who attempted to join an IRS voluntary disclosure program. The complaint contains the expected allegations of skullduggery. I have cut and paste below certain allegations regarding the class of plaintiffs and the plaintiff's lawyers (some of the formatting is not perfect).


MATTHEW THOMAS and HIMANSHU                                NO. 1 :11-cv-4798
PATEL, on their own behalf and on behalf
of all others similarly situated,
                                                                                                 PLAINTIFFS' ORIGINAL
                                                                                                 CLASS ACTION COMPLAINT

v.                                                                                              JURY TRIAL DEMANDED




* * * *


9. Plaintiffs bring this action on their own behalf and, pursuant to Rule 23(b)(l)(A), (b )(2), and/or (b )(3) of the Federal Rules of Civil Procedure, as a class action on behalf of themselves and the nationwide class of all persons (the "Class Members," the "alleged class" or the "Class") defined below against Defendant:


All United States citizens who held an account in Switzerland with UBS at any time from 2002 through 2008 and who have paid or offered to pay the United States Internal Revenue Service ("IRS") back-taxes and penalties and/or interest under the 2009 IRS Voluntary Disclosure Initiative or similar program as a result of not disclosing or declaring such Swiss account to the IRS or not paying income tax to the IRS derived from such Swiss Account. This Class is intended to include all persons who went to Switzerland to open the Swiss Account; opened the Swiss Account from the United States or any other place outside of Switzerland; inherited the Swiss Account; or came into ownership of possession of the Swiss Account through any other means or circumstances.

10. Plaintiffs and the Class Members each and all have tangible and legally protectable interests at stake in this action.

11. The claims of Plaintiffs and the Class Members have a common origin and share a common basis. The claims of all class members originate from the same fraudulent transaction predicated by the Defendant.

12. Plaintiffs state claims for which relief can be granted that are typical of the claims of the Class Members. Thus, the class representatives have been the victims of the same illegal acts as each member of the class.

13. If brought and prosecuted individually, each of the Class Members would necessarily be required to prove the instant claim upon the same material and substantive facts, upon the same remedial theories and would be seeking the same relief.

14. The claims and remedial theories pursued by Plaintiffs are sufficiently aligned with the interests of the Class Members to ensure that the universal claims of the alleged class will be prosecuted with diligence and care by Plaintiffs as representatives of the Class.

15. The Class Members are so numerous that joinder of all members is impracticable. [*4] Based upon information and belief, the Defendant maintained thousands of the UBS Swiss Accounts for thousands, if not, tens of thousands of U.S. clients and, according to published IRS reports, over 15,000 persons have applied for the amnesty described in paragraph 9 above.

16. There are questions of law and fact common to the alleged class. Such common questions include, inter alia:

a. Whether Defendant's acts and practices constitute violations of applicable law for which Plaintiffs and the Class Members are entitled to recover restitution or damages or for which disgorgement of ill-gotten monies is appropriate;

b. Whether Defendant has been unjustly enriched through the activities described herein; and

c. Whether, in communications with Plaintiffs and the Class Members, UBS omitted or misrepresented material facts about whether Class Members were required to disclose their UBS Swiss Accounts on their United States tax returns and pay taxes to the United States on income derived from assets contained in their UBS Swiss Accounts.
17. Adjudications with respect to individual members of the Class would, as a practical matter, be dispositive of the interests of the other Class Members who are not parties to the action or could substantially impair or impede their ability to protect their interests.

18. Defendant has acted or refused to act on grounds generally applicable to the Class, making appropriate final relief with respect to the Class as a whole. The prosecution of separate actions by individual members of the Class would create a risk of inconsistent or varying adjudications with respect to individual members of the alleged Class which would [*5] establish incompatible standards of conduct for the party opposing the Class. Such incompatible standards, inconsistent or varying adjudications on what, of necessity, would be the same essential facts, proof and legal theories, would create and allow to exist inconsistent and incompatible rights within the plaintiff Class. Further, the failure to permit this cause to proceed as a class action under Rule 23(b )(I )(A) would be contrary to the beneficial and salutary public policy of judicial economy in avoiding a multiplicity of similar actions. Plaintiffs also allege that questions of law and fact applicable to the Class predominate over individual questions and that a class action under Rule 23(b )(3) is superior to other available methods for the fair and efficient adjudication of the controversy. Failure to permit this action to proceed under Rule 23 would be contrary to the public policy encouraging the economies of attorney and litigant time and resources.

19. The named Plaintiffs allege that they are willing and prepared to serve the Court and proposed Class in a representative capacity with all of the obligations and duties material thereto.

20. The self-interests of the named Class representatives are co-extensive with and not antagonistic to those of the absent Class Members. The proposed representatives will undertake to well and truly protect the interests of the absent Class Members.

21. The named Plaintiffs have engaged the services of counsel indicated below. Plaintiffs' counsel are experienced in complex class litigation, and in particular class and other litigation involving tax issues, and will adequately prosecute this action and will assert, protect and otherwise represent well the named Class representatives and absent Class Members.

22. A class action is superior to other available methods for the fair and efficient [*6] adjudication of this controversy since joinder of all members of the Class is impracticable. There will be no difficulty in the management of this action as a class action.

23. Plaintiffs will fairly and adequately protect the interest of the Class and have no interests adverse to or which directly and irrevocably conflict with the interests of other Class Members.


3 North Second Street, Suite 300
St. Charles, IL 60174
(630) 232-6333 (telephone)
(630) 845-8982 (fax)

123 77 Merit Drive, Suite 900
Dallas, Texas 75251
(214) 572-1700 (telephone)
(215) 571-1717 (fax)

223 E. College Street
Grapevine, Texas 76051
(817) 329-2003 (telephone)
(817) 329-8715 (fax)


  1. This is not surprising. I'm only surprised that it took this long.

    I think that plaintiffs may face some difficulty because of the doctrine of "unclean hands". Having availed themselves of accounts and strategies to escape US taxation, plaintiffs are now essentially claiming that it was UBS' fault that plaintiffs had to enter the OVDP.

    Perhaps UBS may make settle to avoid the litigation, but if the litigation proceeds, I think it will be difficult for plaintiffs.

  2. Interesting and more than a little surprising.

    Not knowing much about the class action legal techniques, one question occurs to me: unlike a class action say about defective brakes on a car, how can you locate the members of the class entitled to participate. Surely, some holders of UBS accounts who did not participate in the IRS program will not be anxious to disclose the existence of the illegal account? Or perhaps the ability to locate affected plaintiffs not necessary?

    Help a confused soul understand?


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