Another UBS/Wegelin Related Indictment in SDNY (11/19/14)

USAO SDNY announced here the unsealing of an indictment against Peter Canale, a Kentucky resident who was arrested yesterday at this home in Kentucky. The indictment and prosecution will be in SDNY.  The key excerpts from the press release are:

Canale conspired with others – including Michael Canale, his brother, Beda Singenberger, a Swiss citizen who ran a financial advisory firm, and Hans Thomann, a Swiss citizen who served as a client adviser at UBS and certain Swiss asset management firms – to establish and maintain undeclared bank accounts in Switzerland and to hide those accounts from the IRS.  Canale used a sham entity to conceal from the IRS his ownership of the undeclared accounts and deliberately failed to report the accounts and the income generated in the accounts to the IRS. 

In approximately 2000, a relative of Canale’s who held an undeclared bank account in Switzerland died and left a substantial portion of the assets in the undeclared account to Canale and Michael Canale.  Canale and his brother met with Thomann and Singenberger and determined they would continue to maintain the assets in the undeclared account for the benefit of Canale and his brother.  

Thereafter, in approximately 2005, Canale, with Singenberger’s assistance, opened an undeclared account at the Swiss bank Wegelin.  The account was opened in the name of a sham foundation formed under the laws of Lichtenstein to conceal Canale’s ownership.  As of Dec. 31, 2009, the account held assets valued at approximately $789,000.   

For each of the calendar years from 2007 through 2010, Canale willfully failed to report on his tax returns his interest in the undeclared accounts and the income generated in those accounts.  For each of these years, Canale also failed to file a Report of Foreign Bank and Financial Accounts (FBAR) with the IRS, as the law required him to do.
Canale, 61, is charged with one count of conspiracy to defraud the United States, evade taxes, and file a false and fraudulent income tax return, which carries a statutory maximum sentence of five years in prison.  The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

My prior blog entries on Michael Canale are:

• U.S. Taxpayer Pleads to FBAR and Tax Perjury Violation (3/14/13), here.
• U.S. Using a Client List of Indicted Swiss Banker/Enabler (3/14/13), here.

The conspiracy count, as I read the description, is a defraud and offense conspiracy.  Also, it is not clear from  the description why the indictment was sealed and the necessity for an arrest.

When I first saw the venue in SDNY, I thought this might signal or evidence a trend to go to SDNY rather than more remote districts.  But given the relationship to the other conspirators, including his brother, Singenberger and Thomann who were indicted in SDNY, then SDNY would be the logical venue.  (Note that the Government has wide discretion of venue on conspiracy charges.)