Saturday, October 10, 2015

Schumacher, UBS Banker Enabler, Sentenced to Probation Only and Fine (10/10/15)

Hansruedi Schumacher, a former UBS banker, who pled guilty to conspiracy was sentenced to no incarceration or home confinement, to five years probation and to fine of $150,000.  See Davod Voreacos, Ex-UBS Banker Schumacher Avoids Prison in U.S. Tax Investigation (BloombergBusiness 10/6/15), here.  My prior post on Schumacher is Schumacher, UBS and Neue Zürcher Bank Enabler, Pleads Guilty (Federal Tax Crimes Blog 4/7/15), here.

Excerpts from the article are:
“Schumacher’s willingness to come forward and subject himself to U.S. jurisdiction and cooperate, when he had no pressure to do so, cannot be overvalued,” U.S. prosecutor Mark Daly wrote in a Sept. 28 memo to the sentencing judge. He cooperated “at great peril to himself,” exposing himself to prosecution in Switzerland under bank secrecy and economic espionage laws, Daly wrote. 
After testifying at Weil’s trial, Schumacher also helped U.S. prosecutors investigating American taxpayers who hid assets from the Internal Revenue Service, Daly wrote. He is the seventh Swiss banking enabler who was convicted and sentenced. He faced as long as five years in prison. 
Only one of the bankers got prison time, former UBS banker Bradley Birkenfeld, who was a whistle-blower. Three others avoided prosecution by cooperating. 
Schumacher attorney Peter Raben said in a sentencing memo on Sept. 28 that his client could have stayed in Switzerland, where he wouldn’t have been extradited, and lived a “peaceful and anonymous existence among family and friends.” 
Instead, he chose to cooperate, which meant he “risked the scorn of his fellow countrymen for betraying their arrogance; he risked ostracism, for himself and his family; he risked expulsion from the financial marketplace, and the loss of his career,” and he risked prosecution in Switzerland, Raben wrote.
In a TNT article, William Hoke, Former UBS Banker Gets 5 Years' Probation, $150,000 Fine, 2015 TNT 194-5 (10/7/15), link not available, the author adds (internal TNT citation omitted):
  Schumacher's lawyer, Peter Raben, told Tax Analysts that his client was facing a maximum prison sentence of five years and a fine of $250,000. The sentencing guidelines call for a prison term of between 57 and 71 months and a fine of $100,000. Raben said Schumacher will be allowed to serve his probation in Switzerland. 
* * * * 
Raben also cited the requirement of 18 U.S.C. section 3553(a)(6) to "avoid unwarranted disparity among defendants with similar records who have been found guilty of similar conduct." Raben said five defendants in similar circumstances received probation and three were not prosecuted. 
The only other relevant case, which Raben described as an "outlier," is that of Bradley Birkenfeld. The former UBS employee was sentenced in 2009 to 40 months in prison for what Raben described in the motion as Birkenfeld's failure to fully cooperate with the prosecution. Birkenfeld, who is out on parole after serving 31 months, received a whistleblower award of $104 million from the U.S. government for his "exceptional cooperation" with the DOJ.  
Birkenfeld was incredulous about Schumacher's light sentence and what he perceives to be the DOJ's incompetence in pursuing individuals involved in the UBS case. 
"The DOJ fails to realize I took the greatest risks when I was the historic whistleblower and I gave them Hansruedi's name in 2007," Birkenfeld told Tax Analysts. "The DOJ failed to call me to Weil's trial in 2014. I have 104 million reasons why I am credible and they are not."

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