Swiss Bank Executive Charged with Aiding U.S. Taxpayers Evade Income Tax

Approximately $20 Billion in U.S. Assets Allegedly Concealed from IRS

WASHINGTON – Raoul Weil, a senior executive of a large Swiss bank with offices worldwide, including the United States, has been charged with conspiring with other executives, managers, private bankers and clients of the banking firm to defraud the United States, the Justice Department and Internal Revenue Service (IRS) announced today.

According to the criminal indictment, between 2002 and 2007, Weil oversaw the Swiss bank’s cross-border private banking business that provided services to some 20,000 U.S. clients who reportedly concealed approximately $20 billion in assets from the IRS. Weil, who allegedly referred to this business as "toxic waste," mandated that Swiss bankers grow the cross-border business, despite knowing that this would cause bankers to violate U.S. law.

According to the indictment, when given a choice to wind down, sell or spin off the cross-border business, Weil chose to continue the business because of its profitability. Between 2002 and 2007, the United States cross-border business generated between $200 million a year in revenue for the Swiss bank.

The indictment alleges that through the use of nominee entities, encrypted laptops, numbered accounts and other counter surveillance techniques, Weil and others at the bank assisted U.S. clients conceal their identities and offshore assets from the IRS.

Swiss bankers allegedly routinely traveled to the United States to market Swiss bank secrecy to U.S. clients interested in attempting to evade federal income taxes. In 2004 alone, Swiss bankers, who ultimately reported to Weil, traveled to the United States approximately 3,800 times to discuss their clients’ Swiss bank accounts. Clients of the cross-border business filed false tax returns which omitted the income earned on their Swiss bank accounts and failed to disclose the existence of those bank accounts to the IRS.

"Professionals, including bankers, who promote fraudulent offshore tax schemes against the United States, will be held accountable," said John A. Marrella, Deputy Assistant Attorney General of the Justice Department's Tax Division. "These individuals face severe consequences including imprisonment and substantial fines."

"The IRS is aggressively pursuing anyone who helps wealthy individuals hide their assets offshore and dodge the tax system," said IRS Commissioner Doug Shulman. "As the global commerce and capital flows continue to increase, we have stepped up our efforts on international tax evasion."

"Every American who pays his or her taxes should be offended that a select few use anonymous offshore accounts to avoid paying their fair share," said R. Alexander Acosta, U.S. Attorney for the Southern District of Florida. "We owe it to every American taxpayer to use all lawful means to identify and prosecute both those who evade their taxes, and those who assist them in evading their tax obligations."

The prosecution is being handled by senior trial attorney Kevin M. Downing and trial attorney Michael P. Ben’Ary of the Justice Department’s Tax Division, and Jeffrey A. Neiman, an Assistant U.S. Attorney in the Southern District of Florida.

An indictment is merely an allegation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

###

08-1001

Specifically, PERDIGAO pled guilty to Counts 1, 13, 31 through 56, 60 and 61of the Second Superseding Indictment.  PERDIGAO further consents to forfeiture of approximately $30 million to the United States that was charged in the Second Superseding Indictment, and which PERDIGAO admittedly stole as part of his elaborate fraud scheme.

According to court documents, PERDIGAO, a former partner at the law firm of Adams and Reese, provided legal services to companies in Louisiana’s gambling industry.  PERDIGAO admitted today in court to stealing checks belonging to Adams & Reese and depositing those checks into accounts controlled by PERDIGAO.  Further, he admitted stealing a tax refund check payable in the amount of $485,000 to Horseshoe Entertainment, which was being acquired by Harrah’s.  Once these checks were deposited, they became available for withdrawal and thus exposed the banks, such as Bank One (now Chase) to the risk of civil liability and financial loss.

PERDIGAO also admitted to concocting a fraudulent billing scheme whereby he would submit phony invoices to his clients including Pinnacle Entertainment, Inc. and Boomtown, causing them to remit millions of dollars in fraudulent payments.

According to court records, during a one-week period in October, 2004, PERDIGAO wired nearly $20,000,000 to a Swiss bank account that he controlled in Zurich, Switzerland. Additionally, PERDIGAO pled guilty to tax evasion and filing false tax returns, for the tax calendar years 2000 through 2004. The tax due and owing by PERDIGAO exceeds approximately $4,500,000 as indicated in the indictment.   The indictment and prosecution of individuals who intentionally conceal income and evade taxes is a vital element in maintaining the public confidence in our tax system.  Income from all sources, legal and illegal is taxable.

By failing to report substantial taxable income and utilizing fraudulent losses on these tax returns, PERDIGAO qualified himself for the earned income tax credit. The earned income tax credit is a refundable federal income tax credit for low-income, working individuals and families.

PERDIGAO faces a maximum term of imprisonment of over 300 years.  He also faces possible fines of over $8 million, as well as criminal forfeiture of $30 million.   Sentencing has been scheduled for February 11, 2009.

U. S. Attorney Jim Letten, speaking to today’s conviction and forfeiture, stated:

“As the result of the expertise, hard work and dedication of the prosecution team, including FBI and IRS Special Agents, a local attorney who had misused his position of trust to grossly enrich himself in a contorted scheme of theft and obstruction, has been brought to justice through his own admission of guilt.  Defendant JAIME PERDIGAO, by openly admitting his guilt to 30 counts of fraud, theft, tax and bank violations, computer hacking, and obstruction of justice, has further demonstrated that this investigation and prosecution by the United States was and is sound, and our evidence uncontroverted and overwhelming.   Moreover, today’s guilty plea, along with the U. S. District Court’s previous rejection of PERDIGAO’S myriad claims against the United States, is confirmation that PERDIGAO’s legal filings, evolving over many months, were absolutely without any merit whatsoever, and were part of a desperate and vicious attack in an attempt to escape punishment for such crimes.  As we have prevailed in this case through professionalism and determination, we will continue to follow evidence of crime wherever it takes us.”

The case was investigated by the Internal Revenue Service and the Federal Bureau of Investigation.

The case is being prosecuted by Assistant U. S. Attorneys James Mann, Salvador Perricone,  Brian M. Klebba, and Loan “Mimi” Nguyen.