Tuesday, April 7, 2015

Schumacher, UBS and Neue Zürcher Bank Enabler, Pleads Guilty (4/7/15)

As expected, Hansruedi Schumacher yesterday pled guilty to one count of defraud / Klein conspiracy.  See Susannah Nesmith and David Voreacos, Ex-UBS Banker Schumacher Pleads Guilty in U.S. Tax Probe (Bloomberg 4/6/15), here.  Schumacher testified as a Government witness in the unsuccessful trial of Raoul Weil.  See Raoul Weil Found Not Guilty (Federal Tax Crimes Blog 11/3/14; 11/6/14), here.

The plea agreement is here.  In the plea agreement, the parties agreed that "the appropriate disposition of this case is, and agree to recommend jointly, that the Court impose a sentence of a term of probation of five (5) years."  That disposition is consistent with the sentences of Andreas Bachmann and Josef Dörig, Swiss enablers sentenced recently.  See Swiss Bank Enablers Get Unsupervised Probation and Relatively Light Fines (Federal Tax Crimes Blog 3/30/15), here.

Last night in the Tax Fraud and Money Laundering class, we covered sentencing.  Within that subject, we covered how plea agreements address sentencing matters, in getting to the "appropriate disposition."  The plea agreement thus addresses the key sentencing calculation factors as follows (with my comments in brackets):

2. The United States and the defendant jointly agree that the appropriate disposition of this case is, and agree to recommend jointly, that the Court impose a sentence of a term of probation of five (5) years.In accordance with Rule 11(c)(1)(B) of the Federal Rules of Criminal Procedure, the United States and the defendant will recommend to the Court that the following provisions of the Sentencing Guidelines apply:

A. Base Offense Level: 26 (U.S.S.G. §§ 2T1.1(a), 2T1.4.1(K)) [Note that the tax loss indicated by the base offense level is between $7,000,000 and $20,000,000.]

B. Sophisticated Means: 2 (U.S.S.G. § 2T1.1(b))(2))

C. Acceptance of Responsibility: - 3 (U.S.S.G. § 3E1.1(a) and (b))

D . Total Offense Level: 25 [The Sentencing range per the Tax Table is 57-71 months.]

3. The parties respectfully submit that they will be making a joint recommendation, pursuant to 18 U.S.C. § 3553(a) and U.S.S.G. § 5K1.1, [Substantial Assistance Departure] that the defendant be sentenced as follows;

A. That the defendant be placed on probation for a period of five years;

B. That the defendant pay a fine of $150,000;

C. That, in addition to the standard terms and conditions of probation, the Defendant be required to (i) abide by all terms and conditions of Paragraph 5, infra, concerning his duty to cooperate under this Plea Agreement, and (ii), to facilitate that cooperation, the defendant be required to return to the United States as requested as part of his requirements under Paragraph 5, infra;

D . That based upon the nature of the tax loss and liabilities in this case, which were personal to each taxpayer, as opposed to the defendant, an order of restitution not be imposed.

4. The United States and the defendant both recommend the sentence 4 set forth in Paragraph 3 based upon the unique facts and circumstances of this case and under the provisions of 18 U.S.C. § 3553(a) and U.S.S.G. § 5K1.1.  Those facts include: (a) the substantial assistance rendered by the defendant, which will be set forth at sentencing or in another pleading', (b) the defendant ceased managing undeclared accounts for U.S. customers and he aided and assisted some of those clients in making voluntary disclosures to the Internal Revenue Service ("IRS"); (c) the trial of this case would be both time consuming and expensive, requiring the government to produce witnesses from all over the United States and from at least one foreign country; in addition, many of the events occurred more than a decade ago, complicating the presentation of evidence; (d) that the sentence would avoid any disparity based upon sentences imposed in similar eases within this district and in other districts, as required under 18 U.S.C. § 3553(a)(6); (e) the defendant may face a subsequent prosecution in Switzerland as a result of his cooperation with United States authorities bases upon Swiss law which criminalizes the disclosure of private banking information; (9 the defendant was not extraditable, based upon Swiss law, yet the defendant voluntarily surrendered for arrest and prosecution; and (g) the sentence recommended by the parties was reached after a consideration of all of the statutory criteria set forth in Section 3553(a).

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