A Swiss asset manager, who allegedly helped move secret bank accounts from the Swiss bank UBS to a smaller Swiss bank when UBS came under IRS scrutiny, was indicted on Tuesday in south Florida on charges of conspiring to defraud the US government.
Martin Lack of Lack & Partner Asset Management AG in Zurich was charged with conspiring with his America-based clients to defraud the US government by helping his customers hide assets and evade paying federal taxes.
He allegedly agreed to open and maintain secret bank accounts at a regional bank in Switzerland for US-citizen customers seeking to avoid the IRS.
Mr. Lack worked at the Swiss banking giant UBS until 2003 when he opened his firm. The indictment says that Lack solicited US customers to open undeclared accounts at UBS and, later, at Cantonal Bank in Basel.
When US officials began an intense investigation of secret banking at UBS, he helped some clients move their accounts to Cantonal Bank, the indictment says. Later, as the investigation of UBS intensified, Lack encouraged his customers not to cooperate with US investigators. He also urged them not to take advantage of a voluntary disclosure program offered by the IRS in 2009.
Lack provided some of his clients with a pre-paid cell phone and instructed them to only use that phone to contact him. The move was an apparent effort to avoid law enforcement surveillance and monitoring of telephone lines.
One client was advised in November 2010 that he had nothing to worry about since the client’s former UBS account was being held as cash in Lack’s office safe. “There is no paper trail because the money [was] put [in] cash,” a Lack associate, Renzo Gadola, told a Mississippi-based customer, according to the indictment.
“You have no link to UBS whatsoever, so 99.9 percent you have nothing to worry about,” Mr. Gadola told the client.
What Gadola did not know was that federal agents were monitoring his activities. Gadola was arrested two days later.
He pled guilty in December 2010 to conspiring to defraud the US government. He is scheduled to be sentenced in November.
The 22-page indictment recounts Lack’s alleged involvement with nine US-based customers. They were from Mississippi, Texas, two from Illinois, two from Florida, New Mexico, Massachusetts, and California.
Lack is the only defendant listed in the indictment. His banking contact at Cantonal Bank is identified as an unindicted co-conspirator.
If convicted, Lack faces a sentence of up to five years in prison and a $250,000 fine.