Another Swiss Bank Enabler Indicted in SDNY (2/6/14; 2/10/14)

I have just been provided documents related to the indictment today of another Swiss bank enabler, one Peter Amrein of Switzerland, a former bank client advisor and independent asset manager working with Swiss banks.  The USAO SDNY press release is here. The indictment is here.  And, after analyzing the documents, Here are the key excerpts from the press release.

AMREIN worked as a client adviser at a Swiss bank (“Swiss Bank No. 3) and, later, as an asset manager at a Swiss asset management firm (the “Swiss Asset Management Firm”). In those roles, between 1998 and 2012, AMREIN helped U.S. taxpayers evade taxes and hide millions of dollars in undeclared accounts at various Swiss banks, including, among others, Wegelin & Co. (“Wegelin”), which previously pled guilty in Manhattan federal court for conspiring with U.S. taxpayers to evade taxes. 

In 1998, AMREIN began to work with Edgar Paltzer, a Zurich-based attorney, in the management of undeclared accounts for a number of U.S. taxpayers (collectively, the “Amrein/Paltzer Clients”). Paltzer has previously pled guilty in the Southern District of New York to conspiring to help U.S. taxpayers evade taxes. AMREIN requested that Paltzer establish sham foundations, organized under the laws of non-U.S. countries, such as Liechtenstein, so that the assets of the Amrein/Paltzer Clients could be maintained in accounts held in the names of these foreign foundations rather than in the names of the clients themselves. AMREIN made this request in order to help clients conceal their ownership of these undeclared accounts from the IRS. 

In 2006, AMREIN left his position as a client adviser at Swiss Bank No. 3, and began to work as an asset manager at the Swiss Asset Management Firm. When AMREIN left Swiss Bank No. 3, he transferred the undeclared accounts of the Amrein/Paltzer Clients to another Swiss bank (“Swiss Bank No. 4”). At Swiss Bank No. 4, the accounts continued to be held in the names of the sham foundations created by Paltzer, and continued to be hidden from the IRS. 

In 2008, it became publicly known that UBS AG (“UBS”) was being investigated by United States law enforcement for helping U.S. taxpayers maintain undeclared accounts. Because of the investigation of UBS, Swiss Bank No. 4 informed AMREIN that it was going to close the undeclared accounts of the Amrein/Paltzer Clients. In order to assist his clients in continuing to maintain undeclared accounts, AMREIN searched for and found another bank in Switzerland (“Swiss Bank No. 1”) that would maintain undeclared accounts of the Amrein/Paltzer Clients. Thereafter, in 2009, AMREIN opened undeclared accounts for the Amrein/Paltzer Clients at Swiss Bank No. 1 in the name of sham foundations and transferred his clients’ assets from Swiss Bank No. 4 to these accounts at Swiss Bank No. 1. For some of these clients, 

AMREIN, with Paltzer’s assistance, helped send funds back to the United States and to other foreign jurisdictions in ways that were designed to prevent U.S. authorities from discovering the existence of the clients’ undeclared accounts. For instance, AMREIN and Paltzer instructed a client adviser at Swiss Bank No. 1 to empty one of the accounts by sending checks in amounts smaller than $9,900 to the beneficial owner of the account, i.e., the U.S. taxpayer. On another occasion, AMREIN and Paltzer instructed the same client adviser to transfer the balance of one of the accounts, which was then valued at over $2.4 million, to another account controlled by the U.S. taxpayer in Belize City, Belize. 

* * *

AMREIN, 52, a Swiss citizen, resides in Switzerland and has not been arrested. 

AMREIN is charged with one count of conspiracy to defraud the United States and the IRS, and faces a maximum sentence of five years in prison, a maximum term of three years of supervised release, and a fine of the greatest of $250,000, twice the gross pecuniary gain derived from the offense, or twice the gross pecuniary loss to the victims. 

Key Features:

Defendant: Pete Amrein
Role: Enabler: Client Advisor with Swiss Bank No. 3; Asset Manager with Swiss Asset Management Firm
Charge: Conspiracy (1 count).
Banks: Swiss Bank No. 3; Wegelin & Co.; Swiss Bank No. 1, Swiss Bank No. 2, and Swiss Bank No. 3. (I will try to identify the Swiss banks as they become known to me.
Related Defendant: Edgar Paltzer, a Swiss lawyer, previously indicted, who will likely be a principal witness against Amrein.  For blogs on Paltzer, see here.
Co-Conspirators: "various U.S. taxpayers"
The Conspiracy: to "hide the U.S. taxpayers' Swiss bank accounts, and the income generated in those accounts" from the IRS via "false and fraudulent federal income tax returns.
Manner and Means:  The usual skulduggery, but on steroids: undeclared Swiss accounts, intervening sham foundations and other entities; travel to U.S. to service the taxpayers / co-conspirators; after the UBS proceedings, helped U.S. clients locate other Swiss banks that would hold undeclared accounts; conversations with high ranking bank executives, etc.

JAT Comments:

1. According to my statistics (updatated spreadsheet will be posted this week), there have been 132 indictments -- 96 taxpayers and 36 enablers.
2. As I say, this seems to be Swiss enabler conduct on steroids.  Not all Swiss enablers were this active and many of them were relatively passive, so are not likely to be at risk of criminal prosecution.  But, I am sure that there are a lot more of the active enablers such as Amrein and Paltzer that the Government can add to its trophies.