First Conviction from UBS Case

In February of this year Swiss banking giant UBS avoided federal prosecution by admitting that it helped U.S. taxpayers avoid income taxes by hiding funds in Swiss accounts. As part of the scheme, the Swiss bankers helped wealthy taxpayers to set up sham companies in off shore tax havens. The bank admitted doing this from 2000 to 2007. UBS was able to hide the funds by creating false documents indicating that the companies rather than the taxpayers were the owners of the monies. As part of its agreement with the United States, UBS turned over the names of hundreds of account holders to federal authorities. Additionally, the US has sued UBS to obtain the names of thousands of other account holders.

The first conviction of an American taxpayer for evading income taxes, based on evidence provided by UBS, has taken place in Miami, Florida. Steven Rubinstein, an accountant in Boca Raton, Florida, has pleaded guilty to filing a false tax return for tax year 2004. Rubinstein also admitted to failing to disclose to the IRS UBS accounts, which he held from 2001 to 2007.

With the help of UBS Rubinstein set up Hybridge International in the British Virgin Islands. Using this company, UBS bankers helped Rubinstein to buy and sell over $4 million in securities. Rubinstein also laundered $3 million through a UBS Monaco account to build a home in Boca Raton. Finally, Rubinstein used UBS accounts to sell more than $2 million in South African currency.

In addition to his prison sentence, Rubinstein must pay back taxes, interest, and penalties. He is cooperating with the government in its continuing investigation.

About Richard Serafini

Welcome to my blog. I am an attorney and practice in the area of corporate trial work. Areas of particular emphasis are white collar defense, securities litigation, health care litigation, internal investigations, RICO, and financial litigation. I will be posting interesting developments in my areas of interest. I hope that you find this blog helpful and informative.