Letter of Apology » Tax Fraud

UBS vs. DOJ: The Inside Scoop

Solomon Wisenberg — Wed, 14 Apr 2010 02:52:26 +0000

Here is a fascinating special report from Lisa Jucca of Reuters detailing Swiss banking giant UBS’s facilitation of tax evasion by certain U.S. citizens, as well as the Department of Justice Tax Division’s successful efforts to pry loose the names of suspected tax evaders from the bank.

UBS Tax Scandal Has Hong Kong Angle

Solomon Wisenberg — Mon, 17 Aug 2009 03:25:21 +0000

Carrick Mollenkamp of the WSJ has an excellent piece here about the widening UBS tax scandal and the use of Hong Kong shelf corporations to facilitate the fraud. Now that the bank has agreed to hand over more names of U.S. taxpayers and increasing numbers of those taxpayers are running to confess to the DOJ, expect new revelations to come in at a fast and furious pace. The article is notable for its intelligent use of plea-related documents filed in U.S. v. John McCarthy. McCarthy is a California-based UBS client who pled guilty on Friday in the Central District of California.

The Swiss Aren’t So Special: We Can Do It Too!

Solomon Wisenberg — Tue, 04 Aug 2009 03:47:54 +0000

The NYT reports here on an Israeli-U.S. tax fraud ring. Charges were unveiled earlier today in Tel Aviv and Chicago. The perpetrators allegedly filed false tax refund requests using the names of unsuspecting U.S. prison inmates. Looks like protective custody may be in order.

White Collar World…..

Solomon Wisenberg — Mon, 20 Jul 2009 14:06:53 +0000

The Washington Post editorializes here for a compromise in the U.S.-Switzerland cold war over UBS’ reluctance to release more names of purported American tax cheats to IRS and DOJ. I understand the Swiss position. It’s tough to be a grown up nation in the 21st Century when a key segment of your economy is devoted to facilitating tax fraud…..Andrew Cuomo is talking to Chuck but in a nasty way, according to this WSJ article. In a Friday letter, the New York AG threatened to sue Charles Schwab & Co. for fraud in connection with its marketing of auction-rate securities. Cuomo is open to a settlement, however, if Schwab buys back the securities from its investor clients. Schwab adamantly denies wrongdoing. Cuomo’s letter provides examples, allegedly supporting his fraud theory. They look pretty weak to me. Let’s see if Andy is as tough on recently departed Auto Task force Chief, and Democratic Party mega-money raiser, Steven Rattner. Fox News reported on his departure, here, last week…..Meanwhile, in the surprise of the century, Neil Barofsky, “the special inspector general overseeing the government’s financial rescue program,” reports that many of the banks receiving TARP money have used those funds for things other than lending! The uses include, investing, repaying debt, and buying other banks. About 80% of the banks spent at least some of their TARP funds in connection with new lending. Barofsky’s report comes out today, according to this Washington Post article. I have an idea to increase employment and reduce waste and fraud. Every company should be required to hire its own special inspector general at inception. Then, after the first special inspector general’s report is issued, the company should be forced to fire the special inspector general on trumped-up charges. We can keep a lot of people employed this way, and generate plenty of news stories about waste and abuse. We should also make every person hire a special inspector general at birth. Then we can ignore virtually every warning the special inspector general gives us and later suffer the consequences. Oh wait–I’ve already done that with Mom and Dad.

The UBS Mess: Stewart Weighs In

Solomon Wisenberg — Wed, 15 Jul 2009 14:15:21 +0000

James B. Stewart of the Wall Street Journal has no sympathy here for UBS, the Swiss Government trying to protect it, or super-wealthy American taxpayers who parked cash in secret UBS accounts in order to defraud the IRS. The particular tax program that got UBS into trouble was implemented while the bank was purportedly cooperating with the IRS. Stewart implies that UBS, in refusing to turn over more depositor names to the United States, is reneging on a prior agreement. That isn’t true. UBS agreed to turn over some names as part of its plea deal with the United States, but the parties agreed to disagree regarding more extensive disclosures. Stewart also exaggerates the U.S. banking system’s privacy protections. Federal grand juries have virtually unfettered power to subpoena U.S. bank accounts and, in many cases, can order the banks not to disclose the subpoena to the customer whose accounts are being examined. Still, it is hard to argue with Stewart’s basic point. The customers at issue were specifically targeted by the bank as part of a scheme to help Americans dodge U.S. tax payments. If a small African or Latin American country, rather than Switzerland, was aiding and abetting its bank’s refusal to cooperate with such an important American tax fraud investigation, it is difficult to believe that we would be witnessing this much U.S. hand-wringing.

UBS: Who Got The Best Deal?

Solomon Wisenberg — Fri, 20 Feb 2009 16:43:29 +0000

Today’s Washington Post has a good story here by David Hilzenrath on the deferred prosecution agreement announced Wednesday between Swiss banking giant UBS and the DOJ. UBS agreed to pay a modest $780 million and gave up the names, and account information, of 200-300 clents. This is far less than the 20,000-50,000 accounts the IRS and DOJ seek, and legal proceedings will continue on that issue.

UBS Senior Executive Raoul Weil Indicted

Dave Westheimer — Thu, 13 Nov 2008 20:22:11 +0000

Raoul Weil, chairman and CEO of UBS’ global wealth management and business banking division, on Wednesday was indicted by a federal grand jury in the Southern District of Florida on charges of conspiring to defraud the IRS by helping US citizens avoid paying federal income tax. The indictment (.pdf) comes as part of the DOJ’s ongoing investigation of UBS’ cross-border banking business. Weil’s division provides cross-border services to about 20,000 clients with assets of about $20 billion. The indictment alleges that about 17,000 of those clients concealed their identities and Swiss bank accounts from the IRS, and that UBS assisted them by failing to report Form 1099 information to the IRS. Weil is accused of facilitating this and failing to stop it (Bloomberg, DOJ). UBS has issued a press release stating that Weil will relinquish his duties.

Brother Of DC Tax Office Fraud Ringleader Gets 51 Month Sentence

Dave Westheimer — Mon, 10 Nov 2008 07:13:04 +0000

Richard Walters of Bowie, Maryland, brother of DC Tax Office fraud ringleader Harriette Walters, was sentenced on Tuesday to 51 months in prison by US District Judge Alexander Williams in Greenbelt, Maryland for his role in the $48 million fraud scheme. He had pleaded guilty to receipt of stolen property and conspiracy to commit money laundering in connection with a property tax refund scheme, and had cooperated with authorities. Walters’ business, Helmet’s Plumbing, was used to launder 15 fraudulently issued DC tax refund checks totaling $4.9 million between 2001 and 2007. Over $1 million of that amount went into accounts he controlled.

Five more cooperating defendants will be sentenced by Judge Williams, including three in December. Harriette Walters pleaded guilty in September in DC (earlier). She will be sentenced on March 25, 2009 by US District Judge Emmet Sullivan (DOJ, WaPo).

Milberg Defendants Cooperman, Selzer Sentenced

Dave Westheimer — Wed, 05 Nov 2008 07:41:59 +0000

In Los Angeles on Monday, US District Judge John Walter sentenced the last two defendants in the long-running kickback scheme at the former Milberg Weiss law firm, now known as Milberg LLP. Former client Steven Cooperman, who acted as a lead plaintiff in some Milberg cases, was sentenced to four months in prison and two years of supervised release; Cooperman pleaded guilty to a conspiracy count last year. Paul Selzer, a former outside attorney who helped Milberg funnel kickbacks to clients, was sentenced to two years probation; Selzer pleaded guilty in July to a tax obstruction count (Reuters).

Milberg Defendants Bershad And Schulman Get Six Month Prison Sentences

Dave Westheimer — Thu, 30 Oct 2008 06:43:06 +0000

In Los Angeles on Monday, US District Judge John Walter sentenced former Milberg Weiss partners David Bershad and Steven Schulman to six months in prison each for their roles in the long-running kickback scheme at the firm, now known as Milberg LLP. Bershad pleaded guilty in July 2007 to a one-count information charging him with obstruction and making false statements. He was the first partner to plead guilty and his cooperation helped the DOJ obtain guilty pleas from the firm and from principals Melvyn Weiss and Bill Lerach, who are currently serving 30- and 24-month prison sentences, respectively. But Walter rejected his plea for probation, calling him an architect of the scheme. Schulman pleaded guilty to a racketeering count in October 2007. Both men had already agreed to forfeit their gains — $7.75 million for Bershad, $1.85 million for Schulman (Bloomberg, Reuters).