A UBS client and chartered accountant has pleaded guilty to filing a false tax return for his 2004 taxes in the latest sign of the IRSs stepped-up enforcement efforts against the Swiss banks U.S. customers.
Steven Michael Rubinstein of Boca Raton, Fla., pleaded guilty last Thursday to the charge of filing a false tax return that failed to disclose the existence of a Swiss bank account maintained by UBS of which he was the beneficial owner and to report any income earned on the account.
According to prosecutors, Rubinstein maintained a UBS bank account in the name of Hybridge International Ltd., a nominee British Virgin Island corporation. He is a chartered accountant who works for an international company that assists clients in building, buying and selling yachts. Rubinstein was charged in April with filing a false income tax return, around the same time another Florida yachting executive and UBS client also pled guilty in a tax case (see Yacht Exec Pleads Guilty in UBS Tax Shelter Case).
Combating offshore tax evasion by wealthy taxpayers continues to beone of the IRS' top priorities, said IRS Commissioner Doug Shulman ina statement. The IRS is committed to vigorously pursuing those whoillegally hide their money offshore as well as the financialinstitutions which help them.
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 $7 million into the U.S. to purchase property and build his personal residence in Boca Raton. Additionally, prosecutors said that Rubinstein deposited and sold more than $2 million in South African krugerrands through his UBS accounts.
Rubinstein acknowledged that he was required to file Reports of Foreign Bank and Financial Accounts, or FBARs, disclosing his UBS bank account for years 2001 through 2007. FBARs must be filed with the U.S. Treasury on or before June 30 of the succeeding year.
However, he admitted that he intentionally failed to file FBARs each year, according to the Justice Department. As part of his plea agreement, Rubinstein agreed to pay a 50 percent penalty for the year with the highest balance in the account as of June 30 in order to resolve his civil liability for failing to file FBARs for tax years 2001 through 2007.
Sentencing has been set for Sept. 30, 2009, before U.S. Judge Marcia G. Cooke. Rubinstein faces a maximum sentence of three years in prison and a maximum fine of $250,000 or twice the amount of pecuniary gain to the defendant or loss to the IRS. Rubinstein remains free on $12 million bail pending his sentencing.
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