MIAMI (Reuters) - A former high-ranking UBS banker charged with helping Americans dodge taxes through secret Swiss bank accounts pleaded not guilty to tax fraud conspiracy on Tuesday in federal court in Florida.
Raoul Weil, a 54-year-old Swiss citizen and former head of global wealth management at UBS, was charged five years ago with conspiring to help thousands of Americans conceal $20 billion in numbered accounts at the bank.
He disputed the charges initially. He was declared a fugitive a few months later, but then was arrested in mid-October on a warrant from Interpol while on vacation in Bologna, Italy.
Weil’s appearance in federal court in Fort Lauderdale on Tuesday was his second since he was extradited from Italy last month. He was granted a $10.5 million bond, pending his arraignment at his first court hearing on December 16.
Wearing a blue suit, blue tie and glasses with thick, black frames, Weil said little in court other than confirm his name and age before the not guilty plea was entered on his behalf.
“We look forward to coming back to Florida, and defend him,” his lawyer, Aaron Marcu, told reporters after the brief court session. No immediate trial date was set at Tuesday’s hearing.
Lawyers for UBS whistleblower Bradley Birkenfeld, the bank employee who revealed the tax fraud conspiracy to U.S. authorities in 2007, fear that Weil may be negotiating a “sweetheart deal” that would spare him a trial and ultimately shield secret account holders and other bankers from prosecution.
The lawyers, who note that Birkenfeld worked directly under Weil when he headed UBS’s former cross-border banking business, have been highly critical of what they often describe as the U.S. government’s failure to prosecute UBS and some of its former top executives.
“Weil can clearly bargain inside information he has that could be embarrassing to American officials or institutions for leniency,” said Stephen Kohn, a Birkenfeld lawyer who also heads the Washington, D.C.-based National Whistleblowers Center.
“Weil knows where all the skeletons are buried,” Kohn added. “The Justice Department must work closely with the IRS and Department of State to make sure that every person guilty of tax evasion in the UBS America’s program are identified and prosecuted,” he said.
Marcu maintains that his client has consistently denied wrongdoing in the case, however.
If convicted, Weil faces up to five years in prison for conspiracy to commit tax fraud.
In a case that shook Swiss banking to the core, UBS paid a record $780 million fine in 2009 and agreed to hand over the names of U.S. clients with secret accounts, breaking Switzerland’s vaunted tradition of banking secrecy to avoid feared criminal charges against the bank or other executives.
Birkenfeld, who knew the inner workings of UBS and spilled many secrets about his former employer’s dealings with U.S. clients, won a record-setting $104 million reward from the U.S. Internal Revenue Service for exposing the UBS tax fraud conspiracy. But he was jailed for 30 months after the government said he withheld information about a billionaire U.S. client.
The reward for Birkenfeld came as U.S. and European authorities were investigating a wide range of tax evasion cases involving people with accounts in Switzerland, a long-standing bastion of banking secrecy that is being forced to change.
Editing by Tom Brown, Eric Walsh and Gunna Dickson