Monday, January 21, 2019

Ex UBS Banker Who Sold Client Data to Germany Convicted of Money Laundering and Acquitted of Bank Secrecy Violation (1/21/19)

A former Swiss Banker has been convicted and sentenced to 40 months in prison for money laundering charges but was acquitted of bank secrecy violations.  I give some of the detail that I think interesting in the excerpts of the articles below.

  • John Miller, Ex-Swiss banker convicted for selling secret tax data to Germany (Federal Tax Crimes Blog 1/21/19), here.  Excerpts:
Rene S., as the 45-year-old ex-banker was called during court proceedings, was sentenced to 40 months in prison and must pay fines and court costs totaling more than 125,000 Swiss francs ($125,300) after being found guilty of charges that included spying and money laundering. 
Rene S., who according to court documents has moved to a small town in Germany just across the Rhine River from Switzerland, did not attend the proceedings in Bellinzona this month. 
He was acquitted of breaking Swiss banking secrecy laws. It was not immediately clear whether Switzerland would seek his extradition, with Swiss officials in Berne saying such a decision would come only after the appeals process had been exhausted and the judgment finalised. 
* * * * 
Prosecutors said that between 2005 and 2012, when Rene S. worked for UBS, he illegally collected data about Germans with accounts at the bank and sold the information for 1.15 million euros ($1.31 million) to tax authorities in North Rhine-Westphalia who were seeking to root out tax dodgers. 
* * * * 
Lawyers for UBS, which paid some $300 million in 2014 to settle claims it helped wealthy Germans evade taxes, had contended during the trial that its former employee’s actions had undermined Switzerland as a financial center. 
* * * * 
A decade ago, Germans were believed to be hiding about 150 billion francs in secret accounts in Switzerland and Liechtenstein. 
But thousands began declaring their assets after North Rhine-Westphalia, with the federal government’s blessing, started buying covertly collected data. 
North Rhine-Westphalia has spent some 17.9 million euros since 2010 on data that helped it recover nearly 7 billion euros ($7.97 billion) in tax revenue. 
In turn, Switzerland fought to protect its banking secrecy laws by prosecuting several people, including Rene S., in separate cases where it accused them of illegally handing over documents.
The dispute has included several twists, including the Swiss filing criminal charges in 2012 against three German tax collectors, accusing them of buying account information from informants. 
And in 2017, Germany arrested a Swiss man they accused of spying on North Rhine-Westphalia's tax authority, forcing Switzerland's spy agency to defend its practices against friendly neighboring countries. The accused Swiss spy got a suspended prison term.
  • Ex-UBS Worker Guilty of Money Laundering in Data Theft Case (SWI 1/21/19), here.  Excerpts:
A former UBS Group AG employee, who fled the country rather than face trial, was found guilty of money laundering by a Swiss court over allegations of the theft and sale of client data to German tax authorities. 
Rene S., as Bloomberg has identified him, was sentenced by a court in Bellinzona, Switzerland, to serve three years and four months in prison. He was cleared, however, of more serious charges of breaking the country’s bank-secrecy rules. 
He was accused of stealing details on more than 200 clients -- including more than 30 family foundations -- that he allegedly sold to German officials, pocketing 1.15 million euros ($1.15 million). The presiding judge, Miriam Forni, said that Rene S. has fled to Germany, where it is unlikely he would face extradition. 
The acquittal on the secrecy charge is the second time in recent months that Swiss prosecutors have lost an attempt to pursue a bank employee over the strictly enforced law, which is considered a key pillar of the banking industry’s reputation for discretion. Rudolf Elmer, a former Julius Baer banker, was cleared in October by the Supreme Court. 
Still, prosecutors said they were pleased with the verdict Monday. 
“He’s not the first one to be convicted in absentia, at least he won’t be returning to Switzerland now,” said Swiss prosecutor Carlo Bulletti. 
* * * * 
The judges said Rene S. wasn’t guilty of banking-secrecy violations because his crime was mostly committed in Germany, where Swiss law has no jurisdiction. The native of Basel, on the Swiss border with Germany, could have been sentenced to up to five years in prison for the bank secrecy violation. 
Elmer’s acquittal was also based on jurisdictional issues, with the nation’s top court saying it had no authority over the Cayman Islands-based unit that he ran. 
Rene S. was convicted of money-laundering over the 1.15 million euros he used to buy and sell an apartment on the Spanish island of Mallorca. He was also found guilty of possession of illegal ammunition after police found hollow-point bullets during a 2013 raid on his home.

No comments:

Post a Comment

Please make sure that your comment is relevant to the blog entry. For those regular commenters on the blog who otherwise do not want to identify by name, readers would find it helpful if you would choose a unique anonymous indentifier other than just Anonymous. This will help readers identify other comments from a trusted source, so to speak.