The first U.S. client of Swiss bank UBS has been arrested on tax evasion charges by federal authorities, and he’s an accountant.
Steven Michael Rubinstein, of Boca Raton, Fla., has been charged, via criminal complaint, with filing a false income tax return. Rubinstein was temporarily detained, pending a bond hearing scheduled for Tuesday, April 7, before Magistrate Judge Seltzer.
The case is an outgrowth of the Justice Department and Internal Revenue Service’s efforts to pierce Switzerland’s bank secrecy laws and uncover the identities of banking clients who have been hiding their assets in numbered accounts.
According to court records, Rubinstein is a chartered accountant who works for an international company that helps clients build, buy and sell yachts. On or about April 9, 2008, Rubinstein signed and filed a 1040 for tax year 2007. The tax return failed to report that Rubinstein had an interest in, or signature authority over, a financial account at UBS in Switzerland. Additionally, Rubinstein failed to report the income he earned on any UBS Swiss bank accounts.
According to court records, Rubinstein was the beneficial owner of UBS accounts in the name of Hybridge International Ltd., a nominee British Virgin Island corporation. From 2001 through 2008, Rubinstein allegedly communicated with bankers at UBS via e-mail, telephone and in person about the purchase and sale of securities worth more than 4.5 million Swiss francs, the conversion of investments from U.S. dollars to British pounds, the deposit and transfer of funds into and out of the UBS Swiss accounts and the repatriation of approximately $3 million into the U.S. to purchase property and build Rubinstein’s personal residence in Boca Raton. Rubinstein allegedly deposited and sold more than $2 million in South African krugerrands through his UBS Swiss bank accounts.
In February 2009, UBS entered into a deferred prosecution agreement in which the bank admitted to helping U.S. taxpayers hide accounts from the IRS. As part of their agreement, UBS agreed to provide the U.S. government with the identities of, and account information for, certain U.S. customers of UBS’s cross-border business (see
“Six weeks ago, through the efforts of the Department of Justice and the Internal Revenue Service, UBS, the largest bank in Switzerland, admitted to illegally helping United States citizens evade their income taxes, and disclosed names of individual taxpayers,” said Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division. “We expect that this prosecution is just the first of the prosecutions that will be brought, as we continue to review the information we have received from all sources.”
