Wednesday, March 14, 2012

Yet Another Swiss Enabler Indicted (3/14/12)

The indictment is of Hans Thomann.  The indictment is here.  The key allegations in the indictment are:

Enabler Defendant:  Hans Thomann

Enabler's Companies:  Prior to 2003, UBS where Thomann served as a client advisor, and later at a series of asset management firms in Switzerland which did not maintain offices in the U.S.

Activity: On behalf of U.S. clients, Thomann managed financial accounts for U.S. taxpayers with Swiss financial institutions.  Neither Thomann nor his asset management firms were licensed or authorized to do money transmitting in the state of N.Y. or with FinCEN.  Thomann conspired with U.S. persons to hide Swiss financial accounts and income via false and fraudulent income tax returns.  Thomann accepted significant sums of cash from U.S. taxpayer clients and redistributed it to other U.S. taxpayer clients while recording the receipts and redistributions to their respective accounts (thus insuring that he did not travel outside the U.S. with cash that was required to be reported).  Collective maximum value for approximately 32 U.S. clients was about $139 million.  The Means and Methods allegations starting on p. 7 and the Overt Acts allegations starting on p. 21 list many specific acts of skullduggery.  Among those are:  (i)  used sham foundations to conceal; (ii) when UBS was pressured to turn over names, he helped U.S. clients transfer to Wegelin and other Swiss banks (pseudonymed as "A Swiss Bank," "Swiss Branch of an Israeli Bank," "A Swiss cantonal bank," "Swiss Liechtenstein Bank No. 1," and "Two Swiss Banks"); and (iii) he made money transfers to U.S. taxpayers both in the U.S. and elsewhere, with specific instances recited.

Unindicted Co-Conspirators:  UBS, Wegelin, Mattias Rickenbach (a Swiss enabler previously indicted, see blogs here), Beda Singenberger (a Swiss enabler previously indicted, see blogs here) and "others known and unknown."

Banks : UBS and Wegelin. and others (see Activity above)

Entities: Yes (the taxpayers employed entities)

Charges:  (1) One count of conspiracy, 18 USC 371, here, (both the ubiquitous Klein / defraud conspiracy and offense conspiracy to violate 7201 (tax evasion), here, and 7206(1), here, (tax perjury), charged as a single count) and (2) Conducting an Unlicensed Money Transmitting Business, 18 U.S.C. 1960, here, and 18 USC 2, here (apparently aiding and abetting rather than causing)

Maximum Incarceration Period: 10 years  (5 years on each count)


Judge: Lewis Kaplan (see Wikipedia entry here)

USAO SDNY Press Release on Thomann and Beck Indictments, here [will link when I get it]:
Quoting the USA: "As alleged, Hans Thomann and Josef Beck acted as full service tax evasion advisers to their American clients who did not want to pay their fair share of taxes. In addition to allegedly helping their clients hide their income overseas, Thomann and Beck helped their clients move hundreds of thousands of dollars across the Atlantic without a trace. Thomann and Beck allegedly used random street corners to transfer paper bags full of cash or hotel rooms to evade any detection, and Beck even had deployed a young child to 'make a drop.' We will not tolerate this type of conduct. These indictments demonstrate that the United States remains committed to bringing to justice U.S. citizens who violate federal tax laws and the foreign bankers and advisers who aid them in doing so. Our investigations into these practices continue." 
 * * * * 
As part of their management of their clients' secret Swiss accounts, THOMANN and BECK facilitated their access to cash in the United States and elsewhere in ways that were designed to evade detection by U.S. law enforcement. For example, THOMANN accepted cash while in the United States from his U.S. taxpayer clients who wished to make deposits into their secret Swiss accounts and then, while still in the United States, used that cash to fulfill requests from other U.S. taxpayer clients who wanted to make withdrawals from their secret accounts. The overall effect of these transactions was to ensure that U.S. taxpayers who held undeclared accounts were able to deposit and withdraw funds from their undeclared accounts without having to travel into or out of the United States with cash, and THOMANN did not have to travel into or out of the United States with cash. THOMANN engaged in these transactions in amounts up to approximately $140,000. 
Similarly, BECK arranged for his clients to receive from others cash in the United States that represented withdrawals from their secret Swiss accounts and also himself accepted cash in the United States for deposit into his clients' Swiss accounts. BECK did so by, among other things, arranging money drops on street corners and arranging for anonymous transfers of cash. In one instance, a client of BECK's who had requested $150,000 from his secret Swiss bank account received a telephone call from an unknown person who directed the client to an address in Brooklyn. When the client arrived at the location, a young child exited a home, walked up to the client's waiting car, and handed the client a bag containing about $150,000 in cash. In another instance, BECK himself provided a client with approximately $20,000 in cash in a brown shopping bag, which was to be debited from the client's undeclared account at UBS.
Bloomberg Article: David Voreacos and Bob Van Voris, Two Swiss Advisers Helped Clients Evade Taxes, U.S. Says (Bloomberg 3/14/12), here.
“Hans Thomann and Josef Beck acted as full service tax evasion advisers to their American clients,” Manhattan U.S. Attorney Preet Bharara said in the statement. Beyond aiding clients in hiding income overseas, they “helped their clients moves hundreds of thousands of dollars across the Atlantic without a trace.”
Jeff Neiman, Two Swiss Advisers Charged with Helping Americans Conceal Assets (Jeff Neiman Blog 3/14/12), here.


  1. It is interesting to note that some clients closed their accounts and repatriated the funds long ago. For example, client 3 closed his acct in 2002, yet the indictment refers failure to file FBARs for 2001 and 2002.

    The account did use an entity, the accountholder met in the US with an asset manager , and was sent various checks in a way that seems to have been designed to avoid creating attention. Perhaps this conduct is what prompted the US to focus on conduct from such a long time ago.

    1. The nature of a conspiracy is that acts can occur over long periods of time. Hence, it is not uncommon to see allegations in the means and methods and overt acts that go beyond what might o otherwise be in the statute of limitations, so long as there are acts within the statute of limitations.


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