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November 7, 2014


Would-be slam dunk in offshore prosecution rejected at the rim

This is an update to a post we did earlier in the week on the trial of former Swiss banker whom U.S. authorities had charged with criminal conspiracy for allegedly helping Americans evade taxes on undisclosed foreign accounts.

As we noted in our November 3 post, Raoul Weil, a former UBS AG executive, is the top-ranking foreign individual to be criminally charged in the U.S. for his role in handling offshore accounts for Americans.

Many observers had expected federal prosecutors to get a conviction against Weil. Indeed, the case seemed to have many of the elements of a show trial for the Department of Justice (DOJ). It looked like a slam dunk.

After all, the DOJ has been building its conspiracy case against Raoul Weil for years. The agency surely hoped to use a conviction against him as leverage to go after other alleged participants in offshore tax evasion.

But the jurors in the courtroom in Fort Lauderdale, Florida, had a different view of the evidence. Not long after hearing closing arguments, they quickly acquitted Weil of the charge of helping U.S. account holders hide assets through Swiss banking subterfuges.

Jurors apparently were distrustful of testimony of witnesses who once worked with Weil but were given leniency by federal prosecutors in exchange for testifying against him.

There was considerable evidence in the case about actions by UBS bankers to enable Americans to side-step U.S. taxes through Swiss accounts. But jurors did not believe prosecutors’ contentions that the executive who oversaw UBS’s vast wealth-management services was aware of and participated in wrongdoing.

As a result, the would-be slam dunk of a prosecution did not go in after all. The jury rejected it at the rim. And everyone concerned with offshore tax compliance issues is trying to understand the implications.

Source: The Wall Street Journal, “Weil Acquittal Complicates U.S. Tax-Evasion Crackdown,” Andrew Grossman, Nov. 4, 2014

Tax Evasion