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The Swiss bank used by the convicted con man known as “The Wolf of Wall Street” agreed to pay almost $188 million to avoid prosecution for helping U.S. clients avoid taxes through such methods as providing untraceable gold bars and cash.
Union Bancaire Privée helped hide assets from the Internal Revenue Service by letting two U.S. clients withdraw gold bars valued at more than $50 million, according to a non-prosecution agreement released Wednesday by the Justice Department. That would be more than a ton of gold at current prices.
The accord is the second-largest penalty secured by the U.S. since March under a disclosure program that requires Swiss firms to say how they helped Americans cheat and where their money went. Through 76 accords, the banks have paid $1.3 billion.
The Geneva-based bank signed a statement of facts with details of misconduct stretching back decades, saying it helped U.S. clients hide accounts and assets from the IRS. From 2008 to 2013, the bank managed 2,919 U.S. accounts with as much as $4.9 billion in assets handled by more than 200 private bankers.
“UBP pays a heavy price for its criminal conduct,” said Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division. Since securing $211 million from BSI SA last March, the U.S. settled with dozens of banks. The payments have escalated in recent weeks. Since Dec. 15, Credit Agricole (Suisse) SA agreed to pay $99.2 million; Bank Lombard Odier & Co. paid $99.8 million; and Bank J. Safra Sarasin AG paid $85.8 million.
Former stockbroker Jordan Belfort, who spent 22 months in jail for money laundering and securities fraud in the 1990s, used UBP to help hide money, according to his memoir, “The Wolf of Wall Street.” That story was retold in the 2013 blockbuster film starring Leonardo DiCaprio. The non-prosecution agreement doesn’t mention Belfort.
UBP helped clients conceal assets in “sham entities” such as artificial corporate structures and through opaque insurance policies, according to the accord. Entities in Panama, Liechtenstein, the British Virgin Islands and the Cayman Islands helped mask the real owners of assets in the accounts.
The bank also eliminated the paper trail to undeclared accounts through gold and cash withdrawals, travel cash cards and credit cards, and by withholding mail or obscuring identities through code names, according to the accord.
UBP bankers helped U.S. clients repatriate cash in amounts below the $10,000 level that triggers reporting requirements, according to the accord. In one case, the bank helped an American client transfer $72,000 from his Swiss account to his brother, who then moved it in nine transfers to the customer’s U.S. account.
By David Voreacos and Giles Broom, Bloomberg. Read full article.