First charge in UBS tax fraud

3rd April 2009, Comments 0 comments

A Florida man is arrested Thursday for hiding money in a Swiss bank account.

WASHINGTON - US authorities Thursday said they charged a Florida man with hiding income and assets in a secret account with Swiss banking giant UBS, the first prosecution in the tax fraud probe.

Steven Michael Rubinstein, of Boca Raton, was charged with filing a false income tax return, the Justice Department and Internal Revenue Service (IRS) said in a statement.

UBS admitted guilt to US tax fraud in February and identified some 300 US clients, including Rubinstein, who are suspected of tax fraud by US authorities.

The bank was forced by the Swiss financial regulator to provide details on the suspects, raising objection in Switzerland where banks operate under strict financial privacy laws.

UBS also paid a fine of USD 780 million (CHF 885 million) as part of a temporary deal to settle the US tax fraud charges.

US officials in a subsequent lawsuit against UBS requested details on 52,000 more UBS clients suspected of tax fraud.

But UBS, the world's largest manager of private wealth, refused to provide the information.

"On 19 February 2009, we reached an agreement with UBS that included, for the first time, the disclosure of the identities of taxpayers that were illegally using Swiss bank accounts to evade US taxes," said R Alexander Acosta, a federal attorney for the southern district of Florida.

"Today is the first of the prosecutions resulting from that disclosure, but it will not be the last."

Rubinstein appeared in a Florida court Thursday and was temporarily detained until a bond hearing on 7 April, officials said.

According to court records, they said, Rubinstein is an accountant who works for an international company that helps clients build, buy and sell yachts.

Rubinstein allegedly filed a US tax form for 2007 that failed to report his UBS account in Switzerland.

Court records showed that Rubinstein was the owner of UBS accounts in the name of Hybridge International Ltd, a British Virgin Island corporation through which he allegedly moved millions of dollars to hide them from US tax authorities.

"Combating offshore tax evasion has been and will continue to be one of the IRS's top priorities," said IRS commissioner Doug Shulman.

AFP / Expatica

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