The article opens:
Diane Butrus, a business executive from St. Louis, wandered the streets of Zurich, looking for a bank that would help her keep $1.5 million hidden from America tax collectors.
One bank after another turned her down on that afternoon in 2009. They were worried about a United States crackdown on tax evasion and were no longer willing to shelter American money.
Finally, across the street from a city park, up a discrete elevator, seated in a luxurious conference room, Ms. Butrus found a banker ready to help. His name was Stefan Buck.Some more excerpts, summarizing facts known to readers of this blog:
Mr. Buck said that his employer, Bank Frey, would be happy to take Ms. Butrus’s money, according to court documents and interviews with Mr. Buck and Ms. Butrus. He instructed her to wire the $1.5 million to Bank Frey. He told her that her name wouldn’t be attached to the new account. It would be known internally as Cardinal, an alias she chose in a nod to her favorite baseball team.
Then, in 2008, a legal earthquake shook the foundations of Swiss banking. American prosecutors started filing criminal charges against bankers and executives who had set up accounts for Americans. In 2009, UBS, the huge Swiss bank, admitted helping Americans hide money from the Internal Revenue Service and agreed to provide authorities with the names of its tax-dodging clients.
Soon Swiss banks were expelling American clients.
Not Bank Frey. It didn’t have offices in the United States, and executives didn’t see it as their responsibility to police whether their clients were paying taxes.
“We decided there’s no reason not to maintain business with American clients,” Mr. Buck said in an interview. Executives consulted with legal experts to ensure they weren’t crossing any lines. “We really tried to make sure that how we did the business is correct.”
Opening accounts for desperate Americans seemed like a golden opportunity. “The positioning of Bank Frey as a solely Swiss private bank is now considered as a competitive advantage by the market,” the bank’s chief executive, Gregor Bienz, said at a board meeting in late 2008, according to records of the meeting. Mr. Bienz didn’t respond to requests for comment.
Over the next few years, hundreds of millions of dollars in American deposits flowed from Swiss banking stalwarts — institutions like Credit Suisse and Julius Baer — to Bank Frey. Its number of American clients roughly tripled, according to court records. By September 2012, nearly half of the bank’s $2.1 billion in assets was held on behalf of American taxpayers.The article then recounts the significant events of the trial.
I am hoping to write more on the case. I want to obtain the jury charges first. In the meantime, I offer the following:
- The indictment of Buck and Pfaltzer, here.
- The Buck Jury Verdict, here.
- The Judgment of Acquittal, here.
13. From at least in or about 2000 through in or about at least 2012, EDGAR PALTZER and STEFAN BUCK, the defendants, conspired with various U.S. taxpayers, and others known and unknown, to ensure that their U.S. taxpayer clients could hide the U.S. taxpayers' Swiss bank accounts, and the income generated in those accounts, from the taxation authority of the United States, the Internal Revenue Service (the "IRS"), via false and fraudulent federal income tax returns.As worded, this does not appear to be an offense conspiracy (e.g., a conspiracy to commit tax evasion).
As I have said before, the defraud / Klein conspiracy crime as formulated parallels the tax obstruction crime, § 7212(a), which is currently awaiting decision by the Supreme Court in Marinello. Tax obstruction has been called the one-person defraud conspiracy. See Roger Russell, The ‘one-man conspiracy’ statute (Accounting Today 12/27/17), here. Hence, what the Supreme Court has to say about tax obstruction may carry over to the defraud / Klein conspiracy.