An accountant millionaire has pleaded guilty to filing a false tax return, making him the first US citizen to face criminal charges stemming from Swiss UBS records controversially procured by the US federal government.
Steven Michael Rubinstein, a Florida-based accountant for an international yacht company, admitted to the felony charge of hiding money in a UBS Swiss account. He used the name of Hybridge International, a sham company in the British Virgin Islands, a federal court in Miami revealed.
Rubinstein is the first US taxpayer charges after UBS surrendered 250 customer names to the IRS to avoid prosecution for helping wealthy Americans dodge taxes. He pleaded guilty to filing a false return in 2004 and failing to disclose UBS accounts from 2001 to 2007.
The US is embroiled in a bitter dispute with the Swiss bank which seeks to shelter its clients behind contentious national secrecy laws. Experts believe the Rubinstein case serves as a shot across the bow for thousands of UBS clients holding secret offshore bank accounts.
Jeffrey Sloman, acting US attorney for Miami, says: "More prosecutions are expected to follow, as we continue to hold accountable those who conceal money and assets in an effort to avoid their income tax obligations."
According to court documents, Rubenstein managed his UBS account between 2001 and 2008 through emails, phone calls and even personal meetings with UBS bankers. He admitted UBS helped him set up the BVI corporation Hybridge International. Over seven years, UBS bankers helped him buy and sell securities worth over $4m
The accountant also converted investments from dollars to sterling, moved his money to and from Swiss accounts and repatriated around $7m into the US to build his plush Florida home, the government says.
Facing sentencing on 30 September, Rubenstein could face up to three years in prison and must pay back taxes, fines and a penalty of 50% the highest annual balance from 2001 to 2007. He is free on $12m bail.
Zurich-based UBS entered into a deferred prosecution agreement in February and admitted to helping US taxpayers hide accounts from the IRS. The firm agreed to pay $780m to the US government, make reforms and provide the US with the names and account information of 250 to 300 US customers, in a blow to Swiss national secrecy laws.
UBS passed information to the Swiss banking authorities which in turn released the data to the US as the account holders appeared to have committed US fraud under Swiss legal guidelines.
As part of the agreement the firm admitted from 2000 to 2007 its private bankers aided Americans evade US taxes by setting up sham offshore companies. UBS says it created misleading forms saying the offshore companies, not taxpayers, were the beneficial owners.
The IRS is pressing forward with a civil suit against the bank, which seeks to force it to disclose the identities of 52,000 extra US customers of UBS with Swiss accounts topping $14.8bn. A federal judge set a hearing into the issue for July but UBS say taking part would violate its national laws.
The increase in minimum AE contributions has had little impact on opt-out rates - with cessations after April increasing by less than two percentage points, data from The Pensions Regulator (TPR) shows.
Follows string of appointments
Follows acquisition of BlackRock's DC platform
‘In the know’
£116.8m of benefits received by customers