Three Swiss bankers, believed to be from Zürcher Kantonalbank (ZKB), have been charged by US Attorney of the Southern District of New York for conspiring to hide more than $420 million in Swiss bank accounts.
The US Department of Justice (DoJ) has charged Stephen Fellman, Otto Huppi, and Christof Reist for conspiracy to hide the money from the Internal Revenue Service (IRS) and to evade US taxes on the income earned in those accounts.
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They each face a maximum sentence of five years in prison and a maximum fine of $250,000.
The three bankers had allegedly opened and managed undeclared accounts from an undisclosed Swiss bank for US taxpayers.
They used code names such as ‘Raincity’ and ‘Kakeycat’, or the names of sham corporate entities, to aid concealment of their taxpayer-clients’ ownership of the accounts, the investigation, which is still ongoing, revealed.
The US DoJ’s statement does not name the bank in question, however other sources suggest the bank involved is ZKB.
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By GlobalDataZKB stops all US business
ZKB released a statement acknowledging the on-going investigation into the conduct of two current and one former employee but has not named the three employees.
In addition, ZKB has stated that business with US clients was never a strategic focus of the company and as such, it has decided to cease all business with the US.
Outright advice to hide money
The investigation also revealed the bankers had travelled to the US and advised clients to set up undeclared off-shore accounts.
Huppi allegedly met clients in New Jersey to set up these undeclared accounts at the bank and also advised clients not to disclose undeclared accounts to US authorities as those who had, now regretted it.
Freeman allegedly told a US taxpayer-client, with an undeclared account at the Swiss bank, that as it did not have offices in the US, it was less vulnerable to pressure from US law enforcement authorities, unlike UBS for example.
The three accused provided their US taxpayer-clients access to their hidden money by mailing them cheques drawn on a correspondent bank account managed by the bank at a financial institution in Manhattan.
They did so in a manner so as to reduce the risk of the undeclared accounts being discovered by the IRS.
The investigation is ongoing.
