A former UBS client who owned and operated several businesses that manufactured and sold watches has pleaded guilty to tax charges related to concealing over $10 million in secret Swiss bank accounts.
Jack Barouh of Golden Beach, Fla., admitted to filing a false tax return for 2007 in which he failed to report that he had an interest in or a signature authority over financial accounts at UBS AG. He also failed to report income earned on his UBS Swiss bank accounts. The UBS accounts were opened in the names of Domilou S.A., a nominee Panamanian corporation, and Similen Investments Limited, a nominee British Virgin Island corporation. The tax loss associated with the Domilou and Similen accounts at UBS was estimated to be approximately $736,269 from 2002 to 2007.
In addition to the two accounts, Barouh owned and controlled several other offshore bank accounts located at banks other than UBS, including accounts in Switzerland and Hong Kong. Beginning in 1976, Barouh allegedly skimmed income from his watch businesses and deposited the proceeds into his undeclared UBS bank accounts. He also deposited unreported sales commissions into the accounts.
According to court documents, beginning in 2007, Barouh attempted to withdraw his funds from Switzerland and repatriate all of the money to the U.S.. However, a Swiss attorney persuaded him to transfer the money from Switzerland to a new bank account in Hong Kong in the name of a nominee Hong Kong corporation. The Swiss attorney then told the defendant to pay himself an annual consulting fee until all of the funds were brought into the U.S.. The Swiss attorney knew the defendant was not going to perform any consulting work.
Barouh faces up to three years in prison. Sentencing has been set for April 16, 2010, before U.S. District Judge Adalberto Jordan in Miami. Barouh remains free on a $1 million bail pending sentencing. As part of his plea agreement, he agreed to pay a 50 percent penalty for the year with the highest balance in his offshore accounts. The highest balance of all of the assets he owned and controlled offshore was approximately $10,017,613. He also must pay any additional taxes, interest and penalties he may owe.
