UBS Client Charged With Tax Evasion Avoids Jail

The UBS offshore account fiasco was a major event in tax evasion prosecution. Now one character who hid 6.1 million with UBS has managed to avoid jail time.

UBS is a huge bank. It is a major player with high end net worth clients. The bank was considered very reputable until the developments of the last few years. The problem? It was discovered that the bank was actively helping Americans avoid paying taxes on their money by moving said funds to Switzerland. An insider at the bank disclosed the information and evidence to the IRS and U.S. Attorney General.

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UBS reacted as you might expect. It balked. First, it argued that it was exempt from prosecution because of Swiss banking secrecy laws. The problem was the bank does big business in the US and it was facing being barred from that market. The bank ultimately paid a huge multi-hundred million dollar fine. Then it did something amazing. It rolled over and agreed to provide the US authorities with the names of the American clients it had helped hide money.

The IRS then did something odd. It announced an Offshore Amnesty program. If tax payers came forward and voluntarily reported themselves, they would get a break. They would have to pay the past tax due plus penalties and interest, but would not be prosecuted for tax evasion. As you can imagine, a large number of people came forward. Some, such as Juergen Homann, did not.

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Juergen Homann is a New Jersey businessman who hid $6.1 million with UBS. He failed to come forward in the voluntary disclosure program and was subsequently charged with tax evasion. He was facing 5 years in jail, but decided to help prosecutors and plead guilty. He apparently was very helpful because he received five years probation, 300 hours of community service, a $60,000 fine and, of course, the payment of all back taxes, penalties and interest.

The UBS mess has only really begun to play out recently. You can expect to see years of additional cases popping up as more and more people rue the day they ever worked with a bank like UBS.

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