(Bloomberg) A defense attorney at the tax-conspiracy trial of Raoul Weil, who once ran UBS AG’s global wealth-management business, sought to show that the government’s key witness resented his boss’s success.

Former UBS banker Martin Liechti testified last Thursday to jurors in a Fort Lauderdale, Florida, federal court that Weil, his superior, knew the bank helped U.S. clients evade taxes. He said Weil refused to bring the firm into compliance. On cross-examination, Weil’s attorney, Matthew Menchel, said both men held similar positions for years at the largest Swiss bank, and sought to show Weil’s promotion gave Liechti a motive to lie.

“The truth is there was always tension between the two of you, and other people noticed,” Menchel said in court Friday. “Isn’t that true?”

“No,” said Liechti, who signed an immunity agreement with U.S. prosecutors in 2008. Liechti said he and Weil were friends and he didn’t resent Weil’s success.

Liechti, the former UBS head of banking in the Americas, is one of several ex-bankers to testify against Weil. He gave the most direct evidence that his boss knew the firm was helping clients hide accounts from the Internal Revenue Service. Weil’s attorney, Aaron Marcu, has blamed the U.S. case on “rogue” bankers testifying against him to save themselves.

U.S. Investigation
Weil, 54, is the highest-ranking official among three dozen foreign bankers, lawyers and advisers charged in a seven-year U.S. investigation of offshore tax evasion. He was indicted in 2008 on charges of conspiring to help as many as 17,000 U.S. taxpayers hide $20 billion from the IRS. He was arrested last year in Bologna, Italy, and waived extradition.

Prosecutors spent four months debriefing Liechti in 2008 before charging the bank with conspiracy the next year. UBS avoided prosecution by paying $780 million and admitting it helped Americans cheat on their taxes.

Menchel, the defense lawyer, and Liechti sparred over whether the accounts of U.S. clients were actually in tax compliance.

“If it was not a problem, why did I spend four months here?” Liechti, a Swiss resident, responded. “Why did I lose my job? Why did UBS pay a $700 million fine for this?”

Menchel also asked about a binder of documents he compiled in early 2008 after concluding UBS would blame the alleged conspiracy on him. Some of those documents showed Liechti tried to push the bank into compliance, he testified.

Menchel repeatedly asked Liechti why he hadn’t just told his assistant to gather everything possibly related to the U.S. business, rather than just documents that exonerated him. Liechti said he and his assistant pulled together the documents they could remember.

Later, Menchel assailed Liechti’s testimony that Weil was unconcerned about compliance issues.

“In your earlier testimony I got the impression that all you cared about was compliance and all Mr. Weil cared about was money,” Menchel said. “Was that the impression you gave this jury?”

Liechti replied, “I have been testifying for a long time. I can only say what I know.”

The case is U.S. v. Weil, 08-cr-60322, U.S. District Court, Southern District of Florida (Fort Lauderdale).

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