Client of UBS and Swiss Cantonal Bank Indicted for Conspiracy to Defraud the IRS

WASHINGTON – A federal grand jury in Fort Lauderdale, Fla., has returned an indictment charging Amir Zavieh of San Francisco with conspiring to defraud the Internal Revenue Service (IRS), the Justice Department and IRS announced today.

According to the indictment, Zavieh, a naturalized U.S. citizen, opened a secret Swiss bank account with UBS AG in Zurich, Switzerland, in March 1989. In 2000, Zavieh executed a document that directed UBS not to disclose his identity and ownership of the account to the IRS. Zavieh concealed the secret account at UBS by placing his domestic assets in the name of a nominee and failing to file income tax returns. One year in which Zavieh did file an income tax return, he failed to report on the return either the secret Swiss account or the income generated by that account.

The indictment further alleges that Zavieh closed his secret UBS account in 2009 after his former UBS banker, Renzo Gadola, advised Zavieh that Martin Lack, Gadola’s former colleague at UBS and then-business partner, could transfer the contents on the UBS account to a new account to be opened at a Swiss cantonal bank. Further, Gadola advised Zavieh to transfer only Swiss Francs from UBS to the cantonal bank in order to avoid detection.

The indictment also alleges that Gadola and Lack managed Zavieh’s secret account at the Swiss cantonal bank until Lack demanded that Zavieh provide him with a Form W-9 which would document that Zavieh was the owner of the account and subject to U.S. taxation. Zavieh refused and Lack transferred management of the secret Swiss account to another Swiss asset manager, who would not require Zavieh to provide a Form W-9.

According to the indictment, Zavieh fabricated a false story about the ownership of the assets in the secret Swiss accounts at UBS and Cantonal Bank in order to conceal the defendant’s ownership and control of assets and income from the IRS. He also made false statements to federal law enforcement agents regarding his ownership and control of the secret Swiss accounts.

On Dec. 22, 2010, Renzo Gadola, a citizen and resident of Switzerland, pleaded guilty to a one-count information charging him with conspiring to defraud the IRS. He has been cooperating with the Justice Department and IRS in providing information about his former U.S. clients who evaded their income taxes and his former Swiss colleagues who assisted those U.S. taxpayers. On Nov. 18, 2011, Senior District Judge James L. King sentenced Gadola to 60 months probation and ordered him to return to the United States at least once each year to assist the Justice Department in its ongoing investigations of illegal cross border banking.

On Aug. 2, 2011, a federal grand jury in Fort Lauderdale, returned an indictment charging Lack, a citizen and resident of Switzerland, with conspiring to defraud the IRS. According to that indictment, Lack assisted numerous U.S. customers to conceal their assets and income through the use of secret Swiss bank accounts. To date, Lack has not been arrested and remains at large.

As alleged in the indictment, U.S. citizens have an obligation to report to the IRS on Schedule B of their U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign county in a particular year by checking “Yes” or “No” in the appropriate box and identifying the country where the account was maintained. They further have an obligation to report all income earned from foreign financial accounts on the tax return and to pay the taxes due on that income. Separately, U.S. citizens with a financial interest in, or signatory authority over, a foreign financial account worth more than $10,000 in a particular year, must also file an Foreign Bank and Financial Accounts form with the Treasury disclosing such an account by June 30 of the following year.

The conspiracy count carries a maximum penalty of five years in prison and a $250,000 fine.

This case is being prosecuted by Trial Attorneys Mark F. Daly and Michelle M. Petersen and Senior Litigation Counsel Kevin Downing of the Justice Department’s Tax Division, and Assistant U.S. Attorney Bertha Mitrani of the U.S. Attorney’s Office for the Southern District of Florida and was investigated with the assistance of the IRS.

An indictment is only an allegation of criminal conduct and is not evidence of guilt. A person is presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.