Wegelin Indictment

8/3/2019 Wegelin Indictment

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA,

-v . -

WEGELIN & CO.,

MICHAEL BERLINKA,

URS FREI, and

ROGER KELLER,

Defendants .

-x

- - - - - - - - - - - - - - - - - -x

COUNT ONE

(Conspiracy)

The Grand Jury charges :

INDICTMENT

81 12 Cr. 02 (JSR)

The Defendants and Co-Consp i ra to rs

1. At a l l t imes r e levan t to t h i s Indic tment , WEGELIN &

CO. ("WEGELIN"), the defendant , founded in 1741, was

Swi tze r land ' s o l d e s t bank. WEGELIN provided pr iva t e banking,

a s se t management, and o ther serv ices to ind iv idua l s and en t i t i e s

around the world, inc luding U.S. t axpayers l i v ing in th e

Southern D i s t r i c t of New York. WEGELIN provided these services

pr inc ipa l ly through " c l i e n t advi sors" based in i t s var ious

branches in Swi tzer land ("Cl ient Advisors") . WEGELIN was

pr inc ipa l ly owned by e igh t managing par tne rs ( the "Managing

Par tners") and was governed by an execu t ive committee t ha t

inc luded the Managing Par tners ( the "Execut ive Committee") .

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WEGELIN had no branches outs ide Switzer land, bu t it d i rec t l y

accessed the U.S. banking system through a cor respondent account

t ha t it held a t UBS AG ("UBS") in Stamford, Connect icut ( the

"Stamford Correspondent Account") . As of in o r about December

2010, WEGELIN had 12 branches in swi t ze r l and and approximate ly

$25 b i l l i on in a s se t s under management . .

2. From a t l e a s t in o r about 2008 up through and

inc luding i n o r about 2010, MICHAEL BERLINKA, the defendant , was

a Cl ien t Advisor a t the Zurich branch of WEGELIN, th e defendant

( the "Zurich Branch") .


including in o r about 2010, URS FREI, the defendant , was a

Cl ien t Advisor a t th e Zurich Branch of WEGELIN, th e defendant .


inc luding in o r about 2010, ROGER KELLER f the defendant , was a

Cl ien t Advisor a t the Zurich Branch of WEGELIN f the defendant .

5. From in o r about 2005 up through and inc luding in o r

about 2010, C l i en t Advisor Af a co-consp i ra to r not named as a

defendant here in , was a Cl ien t Advisor a t the Zurich Branch. At

var ious t imes f C l i en t Advisor A a l so served as the "team leader"

of MICHAEL BERLINKA, URS FREI, and ROGER KELLER, th e defendants ,

and ce r ta in o ther Cl ien t Advisors of the Zurich Branch. As a

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team l eader , C l ien t Advisor A coordinated ce r t a i n a c t i v i t i e s of ,

but d id not supervise , these and o ther C l ien t Advisors .


about 2012, Managing Par tner A, a co-conspira tor n o t named as a

defendant here in , was one of the Managing Par tners of WEGELIN,

the defendant . From in o r about 2005 up through and inc luding

in o r about 2011, Managing Par tne r A was the head o f WEGELIN'S

Zurich Branch. During t ha t per iod , Managing Par tner A

supervised MICHAEL BERLINKA, DRS FREI, and ROGER KELLER, th e

defendants , C l i en t Advisor A, and o ther C l ien t Advisors in the

Zurich Branch with r espec t to , among o ther th ings , the opening

and se rv ic ing of "undeclared accounts" fo r U.S. t axpayers .

"Undeclared accounts" a re bank and secu r i t i e s accounts owned by

U.S. t axpayers whose asse t s , and the income genera ted by the

a s se t s , were not repor ted by th e U.S. t axpayers to th e t axa t ion

au thor i ty of th e United Sta tes , the In te rna l Revenue Serv ice

( "IRS") .


about 2011, Executive A, a co-consp i ra to r n o t named as a

defendant here in , was a member of the Execut ive Committee of

WEGELIN, the defendant , and worked pr imar i ly a t the Zurich

Branch.

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8. At a l l t imes r e levan t to t h i s Indic tment , Beda

Singenberger ("Singenberger") , a co-conspira tor n o t named as a

defendan t here in , was an independent a s se t manager fo r var ious

u . s . t axpayers who held undeclared accounts a t WEGELIN, th e

defendant , UBS, Swiss Bank A, and o ther Swiss banks.

Singenberger helped h is u .S . t axpayer -c l i en t s , WEGELIN, UBS,

Swiss Bank A and o th e r Swiss banks hide such account s , and the

income genera ted t he re in , by, among other th ings , se l l i ng sham

corpora t ions and foundat ions to U.S. t axpayers as veh ic les

through which ' the u .S . t axpayers could hold t h e i r undec la red

accounts , and by managing the asse t s held in such account s .

From a t l e a s t in o r about 2002 to in o r about 2006, Singenberger

regu la r ly t rave led to th e Southern D i s t r i c t of New York and

o ther p laces in the United Sta tes to meet with h is u.S .

t axpayer -c l i en t s with undeclared accounts a t WEGELIN, UBS, and

o ther Swiss banks .

9. From in o r about the mid-1990s up through and

inc luding i n o r about l a t e 2008, Gian Gis le r ("Gis ler" ) , a co

consp i ra to r n o t named as a defendan t here in , was a c l i e n t

advisor a t UBS in Swi tzer land . From in o r about ea r ly 2009 up

through and inc luding in o r about mid to l a t e 2009, Gis le r was

an independent a s s e t manager fo r U.S. t axpayers hold ing

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undeclared accounts a t WEGELIN, the defendant , UBS, and o ther

Swiss banks.

Obligat ions o f United States Taxpayers

With Respect to Foreign Financial Accounts

10. At a l l t imes r e levan t to t h i s Indictment , c i t i z e ns and

r es iden t s of th e United S t a t e s who had income in an y o n e

ca lendar year in excess o f a threshold amount ("U.S. taxpayers")

were requi red to f i l e a U.S. Individua l Income Tax Return ("Form

1040") , fo r t h a t ca lendar year with th e IRS. On Form 1040, U.S.

taxpayers were ob l iga ted to r epor t t h e i r worldwide income,

inc lud ing income earned in fo re ign bank accoun ts . In add i t ion ,

when a U.S. t axpayer completed Schedule B o f Form 1040, he o r

she was requ i red to ind ica te whether , a t any t ime during the

re l evan t year , th e f i l e r had "an i n t e r e s t in o r a s igna tu re o r

o ther au thor i ty over a f inanc ia l account in a fo re ign country ,

such as a bank account , s e c ur i t i e s account , o r o ther f inanc ia l

account . II I f so , th e U.S. taxpayer was requ i red to name the

country .

11. In add i t ion , U.S. taxpayers who had a f inanc ia l

i n t e r e s t in , o r s igna tu re o r o ther au thor i ty over , a fo re ign

bank accountwith

an aggregatevalue of

morethan

$10,000 a t any

t ime dur ing a given ca lendar y ea r were required to f i l e with the

IRS a Report o f Foreign Bank and Financ ia l Accounts, Form TD F

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90-22.1 ("FBARIf) on o r before June 30 of the fol lowing year . In

genera l , the FBAR requi red t h a t the u.s. taxpayer i de n t i f y the

f i n an c i a l i n s t i t u t i o n where the account was held , the type of

account , the account number, and th e maximum value of the

account dur ing th e r e levan t ca lendar year .

Overview of the Conspiracy

12. From a t l e a s t in o r about 2002 up th rough and

inc lud ing in o r about 2011, more than 100 U.S. t axpayers

conspired with , a t var ious t imes, WEGELIN, MICHAEL BERLINKA, URS

FREI, and ROGER KELLER, the defendants , Managing Par tner AI

Cl ien t Advisor A, o th e r Cl ien t Advisors a t WEGELIN, Beda

Singenberger , Gian Gis le r , and othe rs known and unknown, to

defraud the United S ta t e s by conceal ing from th e IRS undeclared

accounts owned by U.S. taxpayers a t WEGELIN. As o f in o r about

2010, th e t o t a l value o f undeclared accounts held by U.S.

taxpayers a t WEGELIN was a t l eas t $1.2 b i l l i o n .

13. Among o th e r t h ings , WEGELIN, MICHAEL BERLINKA, URS

FREI, and ROGER KELLER, the defendants , and o th e r Cl ien t

Advisors opened dozens o f new undeclared accounts fo r U.S.

taxpayers in o r about 2008 and 2009 a f t e r UBS and ano ther l a rge

i n t e rna t iona l bank based in Switzer land ("Swiss Bank B") closed

t h e i r re spec t ive businesses se rv ic ing undeclared accounts fo r

u .S . taxpayers ( the "U.S. cross-border banking bus inesses lf ) in

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the wake o f widespread news r epor t s in Swi tzer land and the

United S t a t e s t ha t th e IRS was i n v es t i g a t i n g UBS fo r helping

U.S. t axpayers evade t axes and hide asse t s in Swiss bank

accounts . WEGELIN, BERLINKA, FREI, KELLER, Cl ien t Advisor A and

othe r Cl ien t Advisors d id so a f t e r WEGELIN's Execut ive Committee

af f i rmat ive ly dec ided to cap tu re fo r WEGELIN th e i l l e g a l U.S.

c ross -borde r banking business l o s t by UBS and d e l i b e ra t e l y s e t

out to open new undeclared accounts fo r U.S. t axpayer -c l i en t s

leaving UBS. At o r about th e t ime t h i s po l icy dec is ion was

announced to team l eader s within WEGELIN, Execut ive A t o ld the

team l eader s t h a t WEGELIN was not exposed to th e r i s k o f

prosecut ion t h a t UBS faced in the United Sta tes because WEGELIN

was smal le r than UBS, and t h a t WEGELIN could charge high fees to

i t s new U.S. t ax p ay e r - c l i en t s because th e c l i e n t s were a f ra id of

cr imina l prosecu t ion in the United Sta tes . As a r e s u l t of t h i s

in f lux o f former UBS U.S. t axpayer -c l i en t s i n to WEGELIN,

WEGELIN's undec lared U.S. taxpayer asse t s under management, and

the fees earned by managing those a s se t s , inc reased

su b s t a n t i a l l y .

14. As p a r t o f t h e i r s a l e s p i t c h to U.S. t axpayer -c l i en t s

who were f l ee ing UBS, a t var ious t imes , BERLINKA, FREI, KELLER,

and othe r C l i en t Advisors t o ld U.S. t ax p ay e r - c l i en t s , in

substance, t h a t t h e i r undeclared accounts a t WEGELIN would not

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be disc losed to the United Sta tes a u thor i t i e s because WEGELIN

had a long t r ad i t i on of bank secrecy and, unl ike UBS, d id no t

have of f i c e s out s ide Switze r land , thereby making WEGELIN l e s s

vulnerable to United Sta tes law enforcement pres su re . Managing

Par tne r A and Executive A par t ic ipa ted in some of th e meetings·

where such s ta tements were made to U.S. t axpayers .

15. In fur therance of th e consp i racy to def raud the

United Sta tes , WEGELIN, the defendant , he lped ce r t a i n U.S.

t axpayer -c l i en t s r epa t r i a t e undeclared funds to the United

Sta tes by i s su ing checks drawn on, and execu t ing wire t r a ns f e r s

through, WEGELIN'S Stamford Correspondent Account fo r th e

benef i t of the U.S. t axpayer -c l i en t s . In add i t ion , WEGELIN

helped a t l e a s t two o ther Swiss banks r epa t r i a t e undec la red

funds to t h e i r own U.S. t axpayer -c l i en t s by i s su ing checks drawn

on WEGELIN's Stamford Correspondent Account for the b e n e f i t of

the c l i en t s of the two othe·r Swiss banks.

Means and Methods o f the Conspiracy

16. Among the means and methods by which WEGELIN, MICHAEL

BERLINKA, URS FREI, and ROGER KELLER, the defendan t s , and t h e i r

co-consp i ra to r s ca r r ied out th e consp i racy were the fol lowing:

a . WEGELIN, BERLINKA, FREI, and KELLER opened and

se rviced undeclared accounts fo r U.S. t axpayers - - sometimes in

the name of sham corpora t ions and founda t ions es tab l i shed under

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th e laws of Panama, Hong Kong, and Liech tens t e in - - fo r the

purpose of help ing the u . s . taxpayers hide asse t s and income

from the IRS.

b. WEGELIN and FREI knowingly accepted bank

documents f a l s e ly declar ing t ha t such sham e n t i t i e s benef i c i a l ly

owned ce r ta in accounts , when WEGELIN and FREI knew t h a t u .S .

taxpayers benef ic ia l ly owned such accounts .

c . WEGELIN, BERLINKA, and FREI opened undeclared

accounts fo r u.S. t axpayers using code names and numbers (so-

ca l l ed "numbered accounts") so t h a t the u .S . taxpayers ' names

would appear on as few documents as poss ib le in th e event t ha t

the documents f e l l in to the hands of t h i rd p a r t i e s .

d. WEGELIN, BERLINKA, FREI, and KELLER ensured t ha t

account s ta tements and re la ted documents were n o t mailed to

t h e i r u . s . t axpayer -c l i en t s in the United S t a t e s .

e . WEGELIN, BERLINKA, and KELLER s en t e-mai l s and

Federa l Express packages to p o t e n t i a l u .S . t axpayer -c l i en t s in

the United Sta tes to s o l i c i t new pr iva te banking and a s s e t

management bus iness .

f . At var ious t imes from in o r about 2005 up through

and inc luding in o r about 2007, WEGELIN, BERLINKA, FREI, and

KELLER communicated b y e - m a i l and/or te lephone with u .S .

t axpayer -c l i en t s who had undeclared accounts a t WEGELIN. Client

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Advisors sometimes used t h e i r persona l e -mai l accounts to

communicate with u.s. taxpayers to reduce th e r i sk of de tec t ion

by United S t a t e s law enforcement a u thor i t i e s .

g . B e g i n n i n g in o r about l a t e 2008 o r ear ly 2009,

and a f t e r WEGELIN began to-open new undeclared accounts fo r U.S.

taxpayers f l ee ing UBS, Managing Par tne r A i n s t ruc ted BERLINKA,

FREI, KELLER and o ther Cl ien t Advisors o f the zur ich Branch not

to communicate with t h e i r U.S. t axpayer -c l i en t s by te lephone o r

e-mai l , bu t r a t h e r to cause t h e i r U.S. t axpayer -c l i en t s to

t r a ve l from the United Sta tes to Switzer land to conduct business

re la t ing to t h e i r undeclared accounts .

h. Various U.S. t axpayer -c l i en t s of WEGELIN,

BERLINKA, FREI, and KELLER f i l e d Forms 1040 tha t f a l se ly and

f raudulent ly f a i l ed to r epor t the exis tence o f, and the income

generated from, t h e i r undeclared WEGELIN accounts ; evaded

su b s t a n t i a l income taxes due and owing to th e IRS; and fa i led to

f i l e t imely FBARs ident i fy ing t h e i r undeclared accounts .

i . Upon reques t , WEGELIN i s sued checks drawn on, and

executed wire t r a ns f e r s through, th e Stamford Correspondent

Account fo r th e b e n e f i t of U.S. taxpayers wi th undeclared

accounts a t WEGELIN and a t l e a s t tw o o th e r Swiss banks. When

doing so, WEGELIN sometimes separa ted the t r ansac t ions in to

batches of checks o r mult ip le wire t r ans fe r s of $10,000 o r less

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to reduce the r i sk t h a t th e IRS would de tec t the undeclared

accounts .

j . To fu r t h e r conceal the nature of the se

t ransac t ions , WEGELIN comingled the funds t r ans fe r red in t h i s

fash ion with mil l ions o f do l l a r s of ad d i t i o n a l funds t ha t

WEGELIN moved through th e Stamford Correspondent Account.

WEGELIN Sol i c i ted New Undeclared

Accounts Through a Third-Party Website


about 2009, WEGELIN, th e defendant , so l i c i t ed new business from

U.S. t axpayers wishing to open undeclared accounts in

Switzer land by r e c ru i t i ng c l i en t s through the websi te

"SwissPr iva teBank.com," which was operated by a t h i rd par ty

independent of WEGELIN ( the "Website Opera tor") . As of on o r

about July 2, 2007, t h i s websi te adver t ised "Swiss Numbered Bank

Account[s]" and "Swiss Anonymous Bank Account[s] ."

Spec i f i ca l ly , th e websi te s t a t e d :

Swiss banking laws a re very s t r i c t and it i s i l l e g a l

fo r a banker to r evea l the persona l d e t a i l s of an

account number unless ordered to do so by a judge.

This i s long es tab l i shed in Swiss law. Any banker who

r evea l s informat ion about you without your consent

r i s ks a cus tod ia l sent [e ]nce i f conv ic ted , with theonly excep t ions to t h i s ru le concerning se r ious

v io l e n t cr imes .

Swiss banking secrecy i s not l i f t e d fo r tax evasion.

The reason fo r t h i s i s because f a i l u re to r epor t

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income o r a s se t s i s not considered a cr ime under Swiss

banking law. As such, n e i t h e r th e Swiss government,

nor any o th e r government, can ob ta in informat ion about

your bank account . They must f i r s t convince a Swiss

judge t ha t you have committed a se r ious crime

punishab le by th e Swiss Penal Code.

The webs i te i nv i t ed use rs to " [ r ] eques t a Swiss banking

consu l ta t ion today" by c l ick ing a l i nk to a "Consu l ta t ion

Request" form t h a t asked fo r informat ion about a use r ' s country

of res idence , te lephone number, and e-mai l . address . The Website

Operator provided t h i s informat ion to WEGELIN Cl ien t Advisors ,

who then sent e -mai l s to th e United Sta tes promoting WEGELIN'S

pr iva te banking and a s s e t management se rv ices . In some cases ,

Cl ien t Advisors sen t WEGELIN's promotional mater ia l s to U.S.

t axpayers in th e un i ted S ta t e s by Federa l Express . Through t h i s

webs i te , over t ime, WEGELIN obtained new undeclared accounts

holding mil l ions of d o l l a r s i n t o t a l fo r U.S. t axpayers .

Managing Par tne r A and o th e r managing par tne rs o f WEGELIN

rece ived quar t e r ly updates on the progress o f t h i s adver t i s ing

program. Managing Par tner A approved payments to the Website

Operator .

WEGELIN Opens New Undeclared Accounts

For U.S. Taxpayers Flee ing UBS

18. In o r about May and June 2008, th e IRS's cr imina l

i n v es t i g a t i o n o f UBS's U.S. cross-border banking business

rece ived widespread media coverage in Swi tzer land and the United

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Sta tes . At o r about t ha t t ime, many u.S. t axpayers wi th

undeclared accounts a t UBS unders tood t ha t the i nves t iga t ion

might r e su l t in the d isc losure of t he i r i den t i t i e s and UBS

account informat ion to the IRS.

19. On o r about July 17, 2008, UBS announced t h a t it was

clos ing i t s u .S . c ross -borde r banking bus iness . Thereaf te r , UBS

c l i e n t advisors began to no t i fy t h e i r u .S . t axpayer -c l i en t s t h a t

UBS was clos ing t h e i r undeclared accounts . Some UBS c l i e n t

advisors t o ld such c l i en t s t ha t they could cont inue to mainta in

undeclared accounts a t WEGELIN, th e defendant , and c e r t a in o ther

Swiss pr iva te banks. At o r about t ha t t ime, it became widely

known in Swiss pr iva te banking c i r c l e s tha t WEGELIN was opening

new undeclared accounts fo r u.S. taxpayers.

20. In o r about 2008, the Executive Committee of WEGELIN,

the defendant , inc luding i t s Managing Par tners , af f i rmat ive ly

decided to capture the i l l e g a l u.S. c ross -borde r banking

business l o s t by UBS by opening new undeclared accounts fo r u.S.

t axpayer -c l i en t s f l ee ing UBS. In o r about 2008, Managi:ag

Par tne r A announced t h i s dec is ion to Cl ien t Advisor A and othe r

team l eaders of the Zurich Branch. At o r about the t ime of t h i s

announcement, Execut ive A t o ld th e team leaders t ha t WEGELIN was

not exposed to the r i sk of prosecut ion t h a t UBS faced because

WEGELIN was sma l l e r than UBS t and t ha t WEGELIN cou ld charge high

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fees to i t s new U.S. t axpayer -c l i en t s because th e c l i en t s were

a f ra id of cr imina l prosecu t ion in th e United S t a t e s .

21. At o r about t h a t t ime, Managing Par tne r A superv i sed

th e crea t ion of a list of Client Advisors a t the Zurich Branch

who were ava i lab le to meet with p o t e n t i a l U.S. t ax p ay e r - c l i en t s ,

many of whom walked in to the Zurich Branch o f WEGELIN, th e

defendant , seeking to open new undeclared accounts . Thereaf te r ,

in o r about 2008 and 2009, MICHAEL BERLINKA, URS FREI, and ROGER

KELLER, the defendan t s , and o ther Cl ien t Advisors met with a t

l ea s t 70 such po te n t i a l c l i e n t s . In these meetings , BERLINKA,

FREI, KELLER and o th e r Cl ien t Advisors in terviewed the p o t e n t i a l

U.S. t axpayer -c l i en t s about t h e i r backgrounds, th e sources of

t h e i r funds, and th e amount of money they wished to t r a ns f e r

from UBS to WEGELIN, among othe r th ings . During these meet ings,

th e U.S. taxpayers t yp ica l ly showed t h e i r U.S. passpor ts ,

adv ised t h a t they were U.S. c i t i z e n s o r l ega l permanent

r es iden t s , conf i rmed t ha t UBS was c los ing t h e i r accounts , and

completed c e r t a ~ n account opening documents. These documents

t yp ica l ly included a s tandard Swiss banking form ca l l ed "Form

A," which c l e a r ly i de n t i f i e d th e U.S. taxpayers as th e

benef i c i a l owners of the accounts . In some cases , as descr ibed

in more de t a i l below, the Cl ien t Advisors sought to reassure

t he i r new U.S. t axpayer -c l i en t s t h a t WEGELIN would n ot disc lose

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t h e i r i d e n t i t i e s o r account information to the IRS. In many

cases , Managing Par tne r A o r Execut ive A jo ined these meet ings .

22. In prepara t ion fo r these meetings, Managing Par tne r A

and Execut ive A superv i sed videotaped t ra in ing se s s ions with

Cl ien t Advisors of th e Zurich Branch to i n s t r u c t them on t h e i r

de l ive ry of c e r t a in s e l l i ng points to be made to U.S. taxpayers

f lee ing UBS. These s e l l i ng po in t s included the f a c t t h a t

WEGELIN, th e defendant , had no branches out s ide Switzer land and

was smal l , d i s c r e e t , and, unl ike UBS, not in th e media.

23. In t h i s manner, WEGELIN, th e defendant , opened new

undeclared accounts fo r a t l e a s t 70 U.S. t axpayers who had f l ed

UBS in o r about 2008 and 2009. Most were opened a t WEGELIN'S

Zurich Branch. When these new undeclared accounts were opened

a t the Zurich Branch, they were designated with a s p ec i a l code -

- "BNQ" - - i nd ica t ing i n t e rna l ly within WEGELIN, among o ther

th ings , t h a t th e accounts were undeclared. At some p o i n t in o r

about 2008 o r 2009, th e Zurich Branch requi red t ha t the. opening

o f a l l new U.S. taxpayer accounts be approved by Managing

Par tner A o r Execut ive A.

24. From in o r about March 2009 up through and including

in o r about October 2009, pursuan t to a s p ec i a l IRS program fo r

U.S. taxpayers wi th undeclared accounts ( the "Offshore Voluntary

Disclosure Program"), approximately 14,000 U.S. taxpayers

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vo lun ta r i ly disc losed to the IRS undeclared accounts held a t

banks around th e world, including WEGELIN, the defendant . As

p a r t o f t h i s process , dozens of u.s. t axpayers ob ta ined cop ies

of t he i r WEGELIN bank records . Some o f these records included

the names of MICHAEL BERLINKA, URS FREI, and ROGER KELLER, th e

defendants , and othe r Cl i en t Advisors . In response to th e

expected d isc losure of Cl ien t Advisors ' names to th e IR S through

the vo lun tary d isc losure program, in o r about 2009, Managing

Par tne r A announced to team l eaders of the Zurich Branch t ha t

Cl ien t Advisors ' names would no longer appear on c e r t a in WEGELIN

records . From a t l e a s t in o r about l a t e 2009 up through and

inc lud ing in o r about ear ly 2010, Cl ien t Advisors ' names were

rep laced by "Team In te rna t iona l , " o r a s imi la r des igna t ion , on

c e r t a i n WEGELIN records , so as to reduce th e r i sk t ha t Client

Adviso rs ' names would become known to th e IRS.

25. In o r about mid-2009, th e Execut ive Committee of

WEGELIN, the defendant , decided t ha t the bank would s top opening

new undeclared accounts fo r U.S. t axpayers , bu t t ha t WEGELIN

would continue to se rv ice i t s ex i s t ing undeclared U.S. taxpayer

accounts . Never the less , in o r about l a t e 2009 or ea r ly 2010,

WEGELIN and MICHAEL BERLINKA, the defendant , and Execut ive A

opened a t l e a s t t h ree new undeclared accounts fo r U.S. taxpayers

who had f l ed from Swiss Bank A when it, l i ke UBS and Swiss Bank

16



B, closed i t s u.s. cross-border banking business fo r both new

and ex i s t ing u.s. t axpayer -c l i en t s . Each of the th ree new U.S.

t axpayer -c l i en t s had a t l e a s t two passpor t s : one from th e United

Sta tes and one from a second country . In each case , WEGELIN,

BERLINKA and Execut ive A opened the new undeclared account under

the passpor t of th e second country , even though WEGELIN,

BERLINKA and Execut ive A wel l knew t h a t the U.S. t axpayer had a

U.S. passpor t .

26. Afte r th e Managing Par tners o f WEGELIN, th e defendant ,

decided to capture UBS's i l l e g a l business fo r themselves , the

t o t a l value of undeclared accounts held by U.S. taxpayers a t

WEGELIN, th e defendant , increased subs tan t i a l ly over t ime. As

of in o r about 2005, WEGELIN, th e defendant , h id a t l e a s t $240

mil l ion in undeclared U.S. taxpayer asse t s from the IRS. By in

o r about 2010, t h i s amount had r i sen to a t l e a s t $1.2 b i l l i on .

New Undeclared Accounts Opened by WEGELIN and MICHAEL BERLINKA

27. In o r about 2008 and 2009, WEGELIN and MICHAEL

BERLINKA, th e defendants , opened new undeclared accounts fo r

numerous U.S. taxpayers f l ee ing UBS, inc lud ing the fol lowing:

Client A

28. At a l l t imes r e levan t to t h i s Indic tment , Cl ien t A, a

co-consp i ra to r no t named as a defendant here in , l ived with h er

husband in Boca Raton, Flor ida . She became a U.S. c i t i z e n in

17



2003. In o r about 1987, Cl ien t A became th e b e n e f i c i a l owner of

an undeclared account a t UBS and i t s predecessor bank. In o r

about July 2008, Cl ien t A/s UBS c l i en t advisor , Gian Gis le r ,

advised Cl ien t A and h er husband t ha t she must c lose her DBS

account because she was American. At o r about t h a t t ime, Gis le r

i n s t ruc ted C l i en t A and her husband not to c a l l UBS from the

United Sta tes , and to ld them t ha t he was l eaving UBS. Gis le r

inv i ted Cl ien t A to move h er account with Gis le r to another

bank, but she dec l ined . G is l e r then recommended WEGELIN, the

defendant , and noted t ha t it was a r e l i a b l e bank t ha t had no

off i ces in th e United Sta tes .

29. In o r about September 2008, Cl ien t A and h er husband

t r ave led to Zur ich to c lose her UBS account . By t ha t t ime,

Gis le r had l e f t UBS, and Cl ien t A had a new UBS c l i e n t adv i sor .

The new UBS c l i e n t adv i so r i n s t ruc ted them not to c a l l from the

United Sta tes , promised t ha t UBS would no t give t h e i r

informat ion to th e IRS, and recommended WEGELIN, th e defendant ,

as a bank a t which to hold Cl ien t A's account .

30. Also dur ing t h i s t r i p , Cl ien t A and h e r husband walked

to WEGELIN I th e defendant , and met with MICHAEL BERLINKA, the

defendant . BERLINKA in terviewed Cl ien t A and h e r husband about

t h e i r persona l background and the source of t h e i r funds, among

o ther th ings . C l i en t A and h er husband to ld BERLINKA t ha t they

18



were U.S. c i t i z e ns , showed t h e i r U.S. passpor ts , and sa id t ha t

they wanted to t r a ns f e r funds from UBS. BERLINKA opened a new

account be ne f i c i a l l y owned by Cl ien t A using th e code name

"N1641" on o r about September 19, 2008. At o r about t h a t t ime,

WEGELIN accep ted a Form A signed by Cl ien t A s t a t i ng t h a t Cl ien t

A was th e b e n e f i c i a l owner o f th e account .

31. In connect ion with the opening o f the account , MICHAEL

BERLINKA, th e defendant , t o ld Cl ien t A and h e r husband t ha t they

would be sa fe a t WEGELIN, th e defendant , and t h a t BERLINKA had

been i n s t ru c t e d not to d i sc lose t h e i r account in fo rmat ion to

United S t a t e s a u thor i t i e s . In add i t ion , BERLINKA i n s t ru c t e d

Cl ien t A and h er husband not to c a l l o r send faxes to WEGELIN

from the United Sta tes and exp la ined t h a t WEGELIN would n ot send

mai l to them in the United S t a t e s .

32. On mult ip le occas ions in o r about 2008 and 2009,

Cl ien t A o r h er husband ca l led BERLINKA from th e United Sta tes

to n o t i fy him t ha t they would be t rave l ing to Aruba. Once in

Aruba, Cl ien t A o r her husband ca l l ed and/or faxed BERLINKA to

reques t t h a t he send checks to them in th e United Sta t e s . In

response , WEGELIN and BERLINKA sen t checks drawn on th e Stamford

Correspondent Account from Swi tzer land to Cl ien t A in Boca

Raton, Flor ida by pr iva te l e t t e r c a r r i e r . WEGELIN i s sued the

checks in th e amount of $8,500 to help conceal th e undeclared

19



account from the IRS. WEGELIN also wired funds fo r th e benef i t

of Cl ien t A through the Stamford Correspondent Account to the

United Sta tes and Aruba. These checks and wire t r a ns f e r s are

s e t fo r th in th e t ab le accompanying paragraph 137 o f t h i s

Indictment .

33. In o r about September 2009, Cl ien t A and h e r husband

l ea rned t ha t t h e i r names and UBS account informat ion might be

provided to th e IRS in connect ion with the August 2009 agreement

between Switzer land and the United Sta tes to d i sc lose UBS bank

records r e l a t i ng to approximate ly 4,450 U.S. t axpayers

(here inaf te r , th e "August 2009 Agreement") . Alarmed by t h i s

news, Cl ien t A 's husband ca l l ed BERLINKA from th e United Sta tes .

During th i s c a l l , BERLINKA advised Cl ien t A 's husband no t to

make a volunta ry d isc losure to the IRS and assured him t ha t

t h e i r WEGELIN account informat ion would n ot be provided to the

IRS.

34. As o f on o r about October 8, 2008, C l i en t A 's

undeclared account a t WEGELIN, the defendant , held approximate ly

$2,332,860.

Clients Band C

35. WEGELIN and MICHAEL BERLINKA, the defendan t s , opened

and managed an undeclared account fo r a marr ied couple , Clients

B a n d C, co-conspira tors not named as defendants here in . At a l l

20



t imes r e levan t to t h i s Indic tment , Cl ien t s B a n d C were U.S.

c i t i z e ns and res iden t s of Flor ida .

36. In o r about 2008, UBS not i f ied Cl ien t s B a n d C t ha t

they must c lose t h e i r undeclared UBS account, which they had

mainta ined s ince in o r about th e l a t e 1990s. Cl ien t B as k ed

Gis le r , h is former UBS c l i e n t adv i se r , i f he knew anyone a t

WEGELIN, the defendant , who could help them. Gis le r recommended

MICHAEL BERLINKA, th e defendant , and arranged fo r Cl ien t s B a n d

C to meet BERLINKA a t the Zurich Branch in o r about October

2008. At t ha t meet ing, Cl ien t s B a n d C showed BERLINKA t h e i r

U.S. passpor ts , provided t h e i r U.S. address , and sa id t h a t they

wanted to t r ans fe r approximate ly $900,000 from UBS to WEGELIN.

Managing Par tner A jo ined the meeting and fu r t h e r in terviewed

Cl ien t s B a n d C. Thereaf te r , Managing Par tne r A approved th e

opening o f a new undeclared account fo r C l i en t s B an d C.

37. At o r about the t ime t h i s account was opened, WEGELIN,

th e defendant , accepted a Form A from C l i en t s B an d C s t a t i ng

tha t they r es ided in Flor ida and b e n e f i c i a l l y owned th e account .

MICHAEL BERLINKA, the defendant , agreed on beha l f o f WEGELIN

t ha t WEGELIN would not send mail to Cl ien t s B a n d C in the

United Sta tes and t h a t Cl ien t s B a n d C could conduct business

with WEGELIN us ing a code name, "N1677." Because Cl ien t B did

not want to use h is r e a l name when ca l l ing WEGELIN from th e

21



United S t a t e s , BERLINKA s e t up th e account so t h a t Cl ien t B

could use ano the r code name "Elvis" - - when he d id so.

Therea f t e r , on one o r two occas ions , Cl ien t B ca l l ed BERLINKA

from the un i ted Sta tes to check h is account balance , which

BERLINKA provided to Cl ien t B.

38. On o r about December 31, 2008, the undeclared account

a t WEGELIN, th e defendant , owned by Cl ien t s B a n d C held

approximate ly $873,958.

39. The fo l lowing t ab le fu r the r desc r ibes Cl ien t s A, B,

and C and o t h e r U.S. taxpayers whose Cl ien t Advisor was MICHAEL

BERLINKA, the defendan t . None of these U.s. taxpayers t imely

repor ted t h e i r accounts a t WEGELIN, the defendant , o r the income

earned t he re in , to th e IRS on Form 1040 o r the FBAR where they

were requ i red to do so .

Code Name (s) o r Approx. Date Approx. HighNominee Name(s) in Approx. WEGELIN Value o f

Benef ic ia l which WEGELIN Dates o f UBS Account(s) WEGELIN

Owner (s ) Account (s ) Held Account(s) Opened Accounts -Cl ien t A N1641 1987-2008 09/2008 $2,544,609

Cl ien t s B & C N1677; Elv is 1998-2008 10/2008 $873,000· · ·Client D Limpopo Foundat ion 1970s-2008 12/2008 $30,895,000

Cl ien t E Hackate Foundat ion 1999-2008 12/12/2008 $1,241,644-'1"otal $35,5·54,253

New Undeclared Accounts Opened by WEGELIN and URS FREI

40. From in o r about 2006 up through and inc luding a t

l e a s t i h o r about 2010, URS FREI, the defendant , opened and/or

se rviced dozens of undeclared accounts fo r U.S. taxpayers a t

22



WEGELIN, the defendant . As of in o r about 2006, FREI managed

undeclared accounts fo r approximate ly 20 U.S. taxpayers holding

approximate ly $4 0 mil l ion in a s se t s . Those f igures grew

subs tan t ia l ly over the next four yea rs . By in o r about 2010,

FREI managed undeclared accounts fo r approximate ly 50 U.S.

taxpayers holding approximate ly $260 mi l l i o n i n a s s e t s . Within

WEGELIN'S Zurich Branch, o th e r Cl ien t Advisors f requent ly sought

FREI's advice concerning t h e i r undeclared U.S. taxpayer

accounts , and some Cl ien t Advisors t r a n s fe r r e d such accounts to

him. In o r about 2006 and 2007, FREI t rave led severa l t imes to

the United Sta tes fo r U.S. t axpayer -c l i en t bus iness . In

pa r t i c u l a r , in o r about August and September 2007, FREI t r ave led

to New York, New York, and to San Diego, San Franc i sco , Marina

d el Rey, and Santa Monica, Cal i fo rn ia .

41. In o r about 2008 and 2009, WEGELIN and URS FREI, the

defendants , opened new undeclared accounts fo r U.S. taxpayers

who had f l ed UBS, inc luding the fo l lowing:

Clients F and G

42. URS FREI, the defendant , was th e Cl ien t Advisor a t

WEGELIN, the defendant , fo r two undeclared accounts mainta ined

by two bro ther s ("Cl ients F and G"), co-conspira tors not named

as defendants he re in , who were, a t a l l t imes r e levan t to t h i s

Indic tment , U.S. c i t i z e ns and res iden t s of Bayside , New York.

23



43. In o r about August 2008, Cl ien t s F and G t r ave led from

New York to Zurich to meet with t h e i r c l i e n t adv i so r a t UBS,

where they had owned separate undeclared accounts s ince in o r

about the 1960s. The UBS c l i e n t advisor informed Cl ien t s F and

G t h a t they must c lose t h e i r UBS accounts , and t h a t o th e r U.S.

taxpayers with undeclared accounts were t r ans fe r r ing funds to

o th e r Swiss banks, inc luding WEGELIN, th e defendant .

44. Cl ien t s F and G then walked to th e Zurich Branch of

WEGELIN, the defendant , which was near UBS's Zurich o f f i c e , and

asked to open a new account fo r each of them. There they met

with URS FREI, th e defendant . FREI in te rv iewed Cl ien t s F and G

and inspec ted t h e i r U.S. passpor ts . Cl ients F and G to ld FREI

t h a t they wanted to t r a n s f e r asse t s from UBS to WEGELIN.

45. FREI opened separate undeclared accounts fo r Cl ien t s F

and G and a s s i s t e d with th e t r a ns f e r of t h e i r funds from UBS to

WEGELIN, the defendant : approximate ly $3.4 mil l ion · fo r Cl ien t F

and $800,000 fo r C l i en t G. In add i t ion , FREI es tab l i shed the

accounts in code names ("N1 PULTUSK" and "Nl DREW,"

respect ively) so t h a t t h e i r names would appear on a minimal

number of records r e l a t i ng to t h e i r accounts .

46. Afte r opening t h e i r accounts , FREI gave h is business

card to Cl ien t s F and G and to ld them to c a l l him if they needed

anything. Thereaf te r , on mult ip le occas ions in o r about 2008

24



and 2009, Cl ien t s F and/or G ca l l ed FREI from the United Sta tes

and spoke to FREI or one of h is ass i s t an t s about the s ta tus and

growth of t h e i r accounts a t WEGELIN, th e defendant .

47. In o r about October 2009, the undeclared accounts

owned by Cl ien t s F and G a t WEGELIN, th e defendant , held

approximately $3.4 mil l ion and $800,000 respec t ive ly .

Clients H and I

48. URS FREI, the defendant , also served as the c l i en t

advisor a t WEGELIN, the defendant , fo r an undeclared account

mainta ined j o in t ly by Clients H and I , co-conspira tors not named

as defendants here in . At a l l t imes r e levan t to t h i s Indic tment ,

Clients H and I were U.S. c i t i zens and res iden t s of New Je rsey .

49. In o r about November 2008, Cl ien t s Hand I's UBS

c l i en t advisor not i f i ed them t ha t they must close t h e i r

undeclared UBS account . Client H asked h is UBS c l i e n t advisor

to r e f e r him to another Swiss bank so t ha t Cl ien t s H and I could

cont inue to mainta in an undeclared account . The UBS c l i en t

advisor recommended WEGELIN, the defendant , and two o ther Swiss

banks.

50. Cl ien t s H and I walked to the Zurich Branch of

WEGELIN, the defendant , and met with URS FREI, the defendant .

FREI to ld Cl ien t s H and I t ha t he handled American accounts fo r

WEGELIN. FREI in terviewed Clients H and I about t h e i r personal

25



background and th e amount they wished to depos i t . C l ien t s H a n d

I showed t h e i r U.S. passpor t s to FREI and t o ld him t ha t they

wanted to t r a ns f e r approximate ly $1 mil l ion from UBS to WEGELIN.

51. On o r about November 13, 2008, URS FREI, the

defendant , opened a new account for Cl ients H and I . At t ha t

t ime, WEGELIN, the defendant , promised Cl ien t s H and I t ha t they

could conduct bus iness with th e bank using th e code name

"N5771." WEGELIN a l so promised no t to send mai l to Cl ien t s H

and I in th e un i ted S t a t e s . In add i t ion , FREI i n s t ru c t e d

Cl ien t s H and I not to c a l l him from the United S t a t e s . Later ,

in o r about Ju ly 2009, FREI l i f t ed t h i s r e s t r i c t i o n a f t e r

Cl ien t s H and I informed him t ha t they had vo lun ta r i l y disc losed

t h e i r WEGELIN account to the IRS.

52. On o r about Ju ly 14, 2009, the undec lared account

owned by Cl ien t s H and I a t WEGELIN, the defendant , held

approximate ly $1,105,593.

Clients J and K

53. URS FREI, th e defendant , also opened an undeclared

account a t WEGELIN, the defendant , fo r Cl ien t s J and K, a

marr ied couple and co-consp i ra to r s not named as defendants

he re in . At a l l t imes r e levan t to t h i s Indictment , Cl ien t s J and

K were U.S. c i t i z e ns l i v ing in Los Angeles, Cal i fo rn ia .

26



54. In o r about 2008, Cl ien t s J and K, who had maintained

an undeclared account a t UBS and one o f i t s predecessor banks

s ince in o r about tbe ~ ~ 8 0 s l were advised by t h e i r UBS c l i e n t

advise r t ha t they must c lose t h e i r undeclared UBS account .

Clients J and K then spoke to an a t to rney in Los Angeles ( the

"Los Angeles Attorneyl l ) , who advised them to c rea te an of f shore

e n t i t y to hold th e account and who r e f e r r e d them to WEGELIN and

URS FREI, th e defendants . Thereaf te r , in o r about November

2008, a t th e Los Angeles Attorney ' s of f i c e , Cl ien t s J and K

completed account opening documents fo r a new account to be held

in the name of White Tower Holdings, LLC, a corpora t ion formed

under th e laws o f Nevis. These documents included: (1) a Form A

s t a t i ng tha t Cl ien t s J and K b e n e f i c i a l l y owned th e White Tower

Holdings account; (2) copies of the U.S. passpor t s of Cl ien t s J

and K; (3) a sepa ra t e WEGELIN form in which Cl ien t s J and K

fa l se ly s t a t e d t ha t White Tower Holdings was th e "benef ic ia l

owner of a l l income from US sources deposi t ed in th e above-

mentioned p o r t f o l i o ( s ) , in accordance with US tax law[] II ; and

(4) even though the account was to be undeclared, Forms W-9 fo r

Cl ients J and K. A Form W-9 i s an IRS form through which U.S.

taxpayers can i de n t i f y themselves as such to a bank, thereby

causing th e bank to r epor t th e U.S. t axpayers ' account income to

27



the IRS each yea r on Form 1099. The Los Angeles Attorney then

s en t the s igned documents from the United Sta tes to WEGELIN.

55. In o r about November 2008 1 Cl ien t s J and K t r ave led to

Zurich and Cl ien t K met with URS FREII th e defendant 1 a t

WEGELIN 1 the defendant . FREI advised Cl ien t K t ha t mai l would

no t be sen t to Cl ien t s J and K in the United S t a t e s . FREI a l so

advised t ha t ROGER KELLER, th e defendant , would be FREI/s

secondary con tac t a t th e bank in the event t ha t FREI was

unava i lable . The nex t day, Cl ien t s J and K met with FREI again

to discuss th e wir ing o f t h e i r funds from UBS to WEGELIN.

56. On o r about September 30, 2009, the undeclared account

owned by Cl ien t s J and K a t WEGELIN, the defendant 1 held

approximate ly $614,408.

Clients Land M

57. URS FREI, th e defendant , was a l so the c l i e n t advisor

fo r an undeclared account held a t WEGELIN 1 th e defendant , by

Cl ien t s L a n d MI a married couple and co-conspira tors not named

as defendants here in . At a l l t imes r e levan t to t h i s Indic tment ,

Cl ien t s L a n d M were U.S. c i t i zens and res iden t s of F lo r ida .

58. In o r about December 2008, the UBS c l i e n t advisor for

Cl ien t s L a n d M no t i f i e d them t ha t they must c lose t h e i r

undeclared UBS account , which they had held in th e name of an

en t i t y ca l l ed the Magabri Foundation, a sham en t i t y formed under

28



the laws of Liech tens te in . Th e UBS c l i e n t adv i so r fu r the r

informed Cl ien t s L a n d M t h a t they could open a new account a t

~ ] ; R , thecfet'endant. Th e UBS c l i e n t advisor spoke to URS

FREI, the defendan t , on beha l f o f Cl ien t s L a n d M and learned

t ha t WEGELIN and FREI were wil l ing to open a new account fo r

them in the name o f t h e i r sham e n t i t y , the Magabri Foundation.

59. The UBS c l i e n t advisor then arranged fo r , and

accompanied C l i en t s L a n d M to , a meeting with URS FREI, the

defendant , a t th e Zurich Branch of WEGELIN, th e defendant , in o r

about January 2009., At o r about t h a t t ime, FREI was informed

t h a t Cl ien t s L a n d M were u.s. c i t i z e ns l i v ing in Flor ida and

t ha t UBS was c los ing t h e i r account .

60. On o r abou t January 12, 2009, WEGELIN and DRS FREI,

th e defendan t s , opened two new undeclared accounts fo r Cl ien t s L

and M in the name of the Magabri Foundation. At o r about t h a t '

t ime, WEGELIN, the defendant , accepted a Form A declar ing t h a t

Cl ien t s L a n d M were the benef i c i a l owners of the accounts .

Copies of t h e i r passpor t s were at tached to th e Form A. In

add i t ion , WEGELIN promised not to send mai l to Cl ien t s L a n d M

in the United Sta t e s , and FREI i n s t ruc ted Cl ien t L not to c a l l

him from the United S t a t e s . FREI l i f t ed th e i n s t ruc t ion not to

c a l l from the United Sta tes in o r about November 2009 a f t e r

29



Client L no t i f i ed FREI t h a t he had vo lun ta r i ly d isc losed the

Magabri Foundat ion accounts to the IRS.

61. On o r about December 31, 2009, the undec lared accounts

owned by Cl ien t s L a n d M a t WEGELIN, the defendant , held

approximate ly $2,729,318.

62. Severa l of the undeclared U.S. t axpayer -c l i en t s of

WEGELIN and URS FREI, the defendants , are descr ibed in the

fol lowing t a b l e . None of these U.S. t axpayers t imely repor ted

t h e i r WEGELIN accounts , o r the income earned t he re in , t o the IRS

on Form 1040 o r the FBAR where they were required to do so .

Approximate

Code Name (s ) o r Date Approximate

Nominee Name(s} in Approximate WEGELIN High ValueBene f i c i a l which WEGELIN Dates o f UBS Account(s) o f WEGELIN

Owner(s) Account(s) Held Account(s) Opened Accounts

Cl ien t F N1 PULTUSK 1960s - 2008 08/2008 $3,200,000

Cl ien t G N1 DREW 1960s - 2008 08/2008 $800,000

Cl ien t s H and I N5571 2006 - 2008 11/13/2008 $1,105,593

Cl ien t s J and K White Tower Hold. 1980s - 2008 11/6/2008 $614,408

Cl ien t sL

and M Magabr i Foundat ion 1997 - 2009 1/12 /2009 $2,729,318Cl ien t s N and 0 Efraim Foundat ion 1973 - 2008 06/2008 $52,747,000

Arthur E i senberg Nl126 1983 - 2008 12/10/2008 $2,234,608

T ota l $60,980,927

New Undeclared Accounts Opened by WEGELIN and ROGER KELLER

63. From in o r about 2007 up through and inc luding a t

l e a s t in o r about 2010, WEGELIN and ROGER KELLER, th e

defendants , opened and se rviced undeclared accounts fo r dozens

o f U.S. t axpayers . By in o r about the end of 2008, KELLER

30



managed undeclared accounts fo r a t l e a s t 30 U.S. taxpayers

holding approximately $120 mil l ion in t o t a l .

64. In o r about 2008 and 2009, WEGELIN and ROGER KELLER,

the defendants , opened new undeclared accounts fo r U.S.

taxpayers l eav ing UBS, including the fol lowing:

Cl ient p

65. ROGER KELLER, th e defendant , served as th e c l i e n t

adv i sor fo r an undeclared account mainta ined by Cl ien t P, a co-

consp i ra to r not named as a defendant he re in , a t WEGELIN, th e

defendant . At a l l t imes re l evan t to t h i s Indictment , Cl ien t P

was a U.S. c i t i zen and r es iden t of Maryland.

66. In o r about 2008, UBS advised Cl ien t p t ha t he must

c lose h is undeclared UBS account , which he had mainta ined s ince

in o r about 1970. Because Client P ' s d e t e r i o ra t i n g hea l th did

not permit him to ' t ravel to Switzer land, C l i en t P 's son, a co-

consp i ra to r not named as a defendant he re in , t r ave led to Zurich

in o r about November 2008 to c lose Cl ien t P 's UBS account and

i den t i fy ano ther Swiss pr iva te bank t h a t would open a new

undeclared account fo r Cl ien t P. The UBS c l i e n t advisor

r e fe r red Cl ien t P 's son to WEGELIN, the defendant , and two othe r

Swiss banks.

67. On o r about November 3, 2008, Cl ien t P 's son walked

in to th e Zurich Branch of WEGELIN, the defendant , without an

31



appointment and asked to open an account . ROGER KELLER, the

defendant , in terviewed Cl ien t P 's son. Cl ien t P 's son to ld

KELLER t ha t he and Cl ien t P were u . s . c i t i z e ns who l ived in th e

United Sta tes and t ha t Client P had mainta ined an account fo r

many years a t UBS.

68. On o r about the fol lowing day, November 4, 2008, ROGER

KELLER, th e defendant , with the approval of Managing Par tner A,

opened a new undeclared account in the name of Cl ien t P 's son.

At o r about t h a t t ime, WEGELIN, the defendant , accepted a Form A

fa l se ly s t a t i ng t h a t Cl ien t P 's son, who l i ved in Manhattan, was

the sole b e n e f i c i a l owner of the account . WEGELIN promised not

to send account s ta tements or o ther mail r e l a t i ng to th e account

to the United S t a t e s .

69. On o r about September 30, 2009, Cl ien t P 's undeclared

account a t WEGELIN, the defendant , held approximate ly $732,938.

Client Q

70. ROGER KELLER, the defendant , was also the c l i e n t

advisor fo r an undeclared account owned by Cl ien t Q, a co-

consp i ra to r not named as a defendant here in , a t WEGELIN, the

defendant . At a l l t imes r e levan t to t h i s Indictment , Cl ien t Q

was a u .S . c i t i zen and r es iden t of Cal i fo rn ia .

71. In o r about December 2008, Cl ien t Q 's UBS c l i e n t

advisor informed him t ha t he must c lose h is undeclared UBS

32



account , which he had owned s ince in o r about 1987. Thereaf te r ,

C l i en t Q 's prev ious UBS c l i e n t advisor t o ld him t h a t WEGELIN,

the defendant , was wi l l ing to open new undeclared accounts fo r

U.S. t axpayers .

72. In o r about January 2009, because Cl ien t Q was unable

fo r hea l th reasons to t r a ve l to Zurich to c lose h is UBS account

Cl ien t Q/s son l a co-conspira tor not named as a defendant

here in , t raveled in h is place . Cl ien t Q/s prev ious UBS c l i e n t

advisor s e t up an appointment a t WEGELIN, the defendant , and

accompanied C l i en t Q/s son to meet with ROGER KELLER, the

defendant and a Zurich Branch supe rv i so r on o r about January 5,

2009. At t h i s i n i t i a l meet ing l KELLER and t he supe rv i so r

in terviewed C l i en t Q 's son about h is persona l background, the

source of th e funds , and the amount t ha t he wished to depos i t l

among o ther th ings . C l ien t Q/s son t o ld KELLER and the

supervisor t h a t he was a U.S. c i t i zen and t h a t he wanted to

t r a ns f e r approximate ly $7 mil l ion from UBS to WEGELIN.

73. La te r t h a t day, ROGER KELLER the defendant , advised

Client Q 's son by te lephone t ha t WEGELIN I th e defendant , would

open an account fo r him. Cl ien t Q 's son then re turned to the

bank and completed va r ious paperwork. At o r about t ha t t imel

KELLER asked C l i en t Q/s son whether he wanted to complete an IRS

Form W-9 1 which i f completed l would cause WEGELIN to f i l e a

33



Form 1099 with the IRS to r epor t the income in C l i en t Q 's

account in a given year . Cl ien t Q 's son to ld KELLER t h a t he did

not wish to complete the Form W-9. In add i t ion , KELLER agreed

t ha t WEGELIN would not send mai l r e l a t i ng to the account to the

United Sta t e s . In the context of a conversa t ion about the

demise of UBS's c ross -borde r banking bus iness , and KELLER to ld

Cl ien t Q 's son t ha t WEGELIN was the o ldes t bank in Switzer land.

KELLER did so to assure him t h a t WEGELIN would n ot d isc lose

Cl ien t Q 's i den t i t y o r account informat ion to the IRS.

74. In o r about September 2009, Cl ien t Q and h is son

t r ave led to Zurich and met with ROGER KELLER, th e defendant , and

a lawyer represent ing WEGELIN, the defendant . In the con tex t of

a discuss ion about the August 2009 Agreement t h a t would . re su l t

in the d isc losure of 4,450 UBS account f i l e s to th e IRS, KELLER

and th e WEGELIN l awyer assured Cl ien t Q and h i ~ son t h a t Cl ien t

Q 's account was safe and t h a t t h e i r names would n ot be re leased

to the United Sta tes a u thor i t i e s .

75. On o r about March 31, 2010, Cl ien t Q 's undeclared

account a t WEGELIN, the defendant , held approximate ly

$7,173,679.

76. C l i en t P, Cl ien t Q, and o ther undeclared U.S.

t axpayer -c l i en t s of WEGELIN and ROGER KELLER, the defendants ,

are descr ibed in the fo l lowing t ab le . None of these U.S.

34



taxpayers t imely repor ted t h e i r WEGELIN accounts , o r the income

earned t he re in , to the IRS on Form 1040 o r the FBAR where they

were requi red to do so .

Code Name (s ) o r Approx. Approx. Date Approximate

Nominee Name(s) in Dates o f WEGELIN High Value

Benef ic ia l which WEGELIN OBS Account(s} o f WEGELIN

Owner(s} Account(s} Held Account(s} Opened Accounts

Cl ien t P Cl ien t p 's Son 1970-2008 2008 $732,93$

Cl ien t Q Cl ien t Q 's Son 1987-2009 1/5/2009 $7,173,679

Cl ien t s R & S Cl ien t R 's Advisor 1970s 12/19/2008 $3,667,724

Clients T & U TMT Family Foundation 1981-2008 11/2008 $1,247,649

Tota l $12,821,990

New Undeclared Accounts Opened by C l i en t Advisor A


about 2010, C l i en t Advisor A opened and se rv iced u.S . taxpayer-

c l i e n t s with undec lared accounts a t WEGELIN, th e defendant ,

inc luding the fo l lowing:

Cl ien t V

7 8 ~ For example, Cl ien t Advisor A opened and mainta ined an

undeclared account fo r Cl ien t V, a co-consp i ra to r no t named as a

defendant here in , a t WEGELIN, th e defendant . Cl ien t V was, a t

a l l t imes re l evan t to t h i s Indic tment , a u.S . c i t i zen and

r e s id en t of Flor ida .

79. Beginning in o r about 2005, Cl ien t V owned undeclared

accounts a t UBS and Swiss Bank B. In o r about 2008 and 2009,

both UBS and Swiss Bank B requi red Cl ien t V to c lose h is

35



80. On o r about Apr i l 14, 2009, Cl ien t V 's c l i en t advisor

a t Swiss Bank B informed 'C l ient V t ha t WEGELIN, th e defendant ,

was opening new undeclared accounts fo r U.S. t axpayers who were

f l ee ing Swiss Bank B. Cl ien t V then walked to th e Zurich Branch

of WEGELIN, the defendant , without an appointment and asked to

open an account .

81. At o r about t h a t t ime, Cl ien t Advisor A in terviewed

Cl ien t V about h is persona l background and the source of h is

funds , among o ther th ings . C l ien t V t o ld Cl ien t Advisor A t ha t

UES and Swiss Bank B were clos ing h is accounts ; showed Cl ien t

Advisor A h is U.S. passpor t ; and to ld Cl ien t Advisor A t ha t he

wished to depos i t approximate ly $5.7 mil l ion a t WEGELIN, the

defendant . Cl ien t Advisor A, with th e express approval of

Managing Par tner A, agreed to open th e account through a

" s t ruc tu re" - - t h a t i s , a sham of f shore en t i t y - - ra th e r than in

Cl ien t V 's own name.

82. To e s t ab l i sh the " s t ruc tu re , " on o r about t h a t same

day, Apri l 14, 2009, Cl ien t Advisor A i nv i t ed an employee of a

Swiss company t h a t provides tax and l ega l se rv ices ("Swiss Trust

Advisor A") to meet with Cl i en t V. At t ha t meet ing, Swiss Trust

Advisor A sold to Cl ien t V an of f - the - she l f sham en t i ty ca l led

the Ni t ro Foundat ion. Cl ien t Advisor A, in tu rn , opened a new

account a t WEGELIN, the defendant , fo r Cl ien t V in the name of

36



the Nit ro Foundat ion. In wr i t t en mate r ia l s t h a t Swiss Trust

Advisor A provided to WEGELIN, Swiss Trus t Advisor A

acknowledged t h a t Cl ien t V 's account would be undec la red . At o r

about t ha t t ime, WEGELIN accepted a Form A dec la r ing t h a t Cl ien t

V, a U.S. c i t i z e n and r es iden t of F lor ida , was th e benef i c i a l

owner of the Nitro Foundation account . In add i t ion , WEGELIN

promised t h a t it would n ot send mai l to Cl ien t V in the United

Sta tes . Thereaf ter , Cl ient V i n s t ruc ted UBSand the Swiss Bank

B to t r a ns f e r h is funds to the Nit ro Foundat ion account a t

WEGELIN. Based on the advice of Cl ien t V 's c l i e n t advisors a t

UBS and Swiss Bank B, the funds were t r a n s fe r r e d in Swiss francs

so t ha t the t ransac t ions would occur en t i r e l y i n Swi tzer l and,

thereby reduc ing th e r i sk t ha t the IRS would d e t e c t th e account .

83. At o r about t h a t t ime, Cl ien t Advisor A i n s t ruc ted

Cl ien t V to u s e ~ t e x t messages to communicate with him, r a the r

than t e l ephone c a l l s , because U.S. law enforcement a u thor i t i e s

did not y e t have th e a b i l i t y to t rack th e huge volume of t e x t

messages t h a t were wri t t en around the world. In add i t ion ,

Cl ien t Advisor A assured Cl ien t V t ha t h is account would remain

safe a t WEGELIN because the bank was very old , had a r ich

t r a d i t i on , and d id no t do business in th e United S t a t e s .

84. In o r about June 2009, Cl ien t Advisor A met with

Cl ien t V in Miami, Flor ida .

37



85. On o r about October 15 1 2009 1 Cl ien t V's undeclared


$4,175,000.

Cl ient W

86. C l i en t Advisor A a l so opened an undeclared account fo r

Cl ien t W, a co-consp i ra to r not named as a defendant he re in .

C l i en t W was, a t a l l t imes re l evan t to t h i s Indictment , a u.s.

c i t i z e n who l ived in Cal i fo rn ia .

87. In o r about 2008, UBS advised Cl ien t W t h a t h is

undeclared UBS account would be c losed . In o r about th e

fol lowing month, Cl ien t W asked Swiss Trust Advisor A how he

could cont inue to mainta in an undeclared account in Switzer land.

Swiss T ru s t Advisor A re fe r red Cl ien t W to WEGELIN I th e

defendant , and accompanied him to meet Cl ien t Advisor A a t

WEGELIN'S Zurich Branch.

88. At t h i s meeting, Cl ien t Advisor A in terviewed Cl ien t W

about h is pe rsona l background, th e source of h is funds , and the

h i s to ry of h is UBS account , among othe r th ings . C l ien t W to ld

Cl ien t Advisor A t h a t he was a U.S. c i t i zen ( showed h is

passpor t , and sa id t ha t UBS was c los ing h is account . Cl ien t

Advisor A t o ld Cl ien t W t ha t WEGELIN, the defendant , would not

have UBS's problems with the IRS because WEGELIN d id not have

branches in th e United Sta tes .

38



89. On o r about December 19, 2008, Cl ien t W re turned to

the Zurich of f i c e of WEGELIN, the defendant , met with Cl ien t

Advisor A, and opened an account in the name of Herzen Resources

S.A. , a sham Panama corpora t ion t h a t Cl ien t W had bought from

Swiss Trus t Advisor A. At o r about t h a t t ime, WEGELIN accepted

a Form A dec la r ing t ha t Cl ien t W b e n e f i c i a l l y owned the Herzen

Resources account . In add i t ion , WEGELIN promised no t to send

mail to C l ien t W in th e United Sta tes .

90. In o r about the summer of 2009, Cl ien t Advisor A t o ld

Cl ien t W t h a t WEGELIN, th e defendant , had s topped opening new

accounts fo r U.S. c l i e n t s , and t h a t Cl ien t W was lucky t ha t he

had been able to open the Herzen Resources account .

91. On o r about September 30, 2009, Cl ien t W's undeclared


$8,685,502.

Undeclared WEGELIN Accounts Managed by

Independent Asset Managers

92. Separate and a p a r t from the undeclared accounts t h a t

WEGELIN, the defendant , opened and managed d i rec t l y fo r U.S.

taxpayers through its Cl ien t Advisors , WEGELIN a l so ac ted as a

cus todian with r e s p ec t to undeclared accounts t h a t were managed

by independent a s s e t managers, including the fol lowing:

39



Kenneth Heller

93. At a l l t imes re l evan t to t h i s Ind ic tment , Kenneth

Hel le r , a co-consp i ra to r not named as a defendant he re in , was a

u.s. c i t i z e n who l i ved and worked pr imar i ly in Manhattan. In o r

about December 2005 and January 2006, Hel le r opened an

undeclared account a t UBS and funded it with approximate ly

$26,420,822 wired from the United Sta tes .

94. On o r about June 6, 2008, Hel le r became concerned

about th e IRS ' s i nves t iga t ion in to UBS's c ross -borde r banking

business and faxed a news a r t i c l e about th e i nves t iga t ion to h i s

UBS c l i e n t adv i so r ("UBS Cl ien t Advisor All) .

95. On o r about June 21, 2008, Hel le r re ta ined an

independent a s s e t manager based in Liech tens t e in ("Liechtens te in

Asset Manager All) to manage a new undeclared account t h a t Hel le r

opened a t WEGELIN, th e defendant , a t o r about t h a t t ime. Over

th e next severa l months, Hel le r funded t h i s account with

approximate ly $19 mi l l i o n wired from UBS. In orde r t o p r o t ec t

Hel le r , th e account was opened in th e name o f Nathelm

Corpora t ion, according to a September 9, 2008 l e t t e r sen t to

H e l l e r ' s t ax p repare r by an a t to rney wo:r:king fo r Hel le r ("Hel ler

Attorney All). This l e t t e r fu r the r s t a t ed :

A ll H el l e r money was t r a n s fe r r e d d i r e c t ly from UBS to

Wegelin. . The problem i s th e US Government

i n t e r fe rence with Swiss Banks, in [an] a t t empt to

40



se ize income tax evaders . . The US Government

g.ladly pressed i t s case with Swiss Govt fo r bank

d i sc losu re o f US c i t i z e ns , e tc . This i s why KH l e f t

UBS [ .]

96. On o r about August 22, 2008, among o t h e r occas ions ,

Liech tens t e in Asse t Manager A faxed to H e l l e r ' s o f f i c e in

Manhattan account s ta tements and o ther documents r e l a t i ng to

Hel le r ' s undeclared account a t WEGELIN, the defendan t .

97. On o r about October 2, 2008, H el l e r Attorney A faxed

i n s t ruc t ions from H e l l e r ' s of f ice in Manhattan to WEGELIN, the

defendant , d i r e c t ing WEGELIN to wire approximate ly $50,000 to a

U.S. bank account t h a t HELLER con t ro l led .

98. On va r ious occas ions in o r about 2008 and 2009, in

response to te lephone and fax reques ts from H el l e r to

Liech tens t e in Asset Manager A, WEGELIN, th e defendant , i s sued

mul t ip le checks drawn on the Stamford Correspondent Account fo r

the benef i t o f H el l e r . For example, as se t for th in the t ab le

accompanying paragraph 137, on o r about Ju ly 8, 2009, WEGELIN

i s sued approximate ly 12 checks fo r H e l l e r ' s be ne f i t , each in the

amount of $2,500. Liech tens te in Asset Manager A s en t these

checks to H e l l e r in the United Sta tes .

99. On o r about December 31, 2008, Hel l e r ' s undeclared

account a t WEGELIN, th e defendant , held approximate ly

$18,466,686.

41



Clients X and Y

100. Beda Singenberger served as th e independent a s se t

manager fo r numerous U.S. t axpayers ho ld ing undeclared accounts

a t WEGELIN, th e defendant , including Cl ien t s X and Y, co-

consp i ra to r s no t named as defendants he re in . At a l l t imes

re l evan t to t h i s Ind ic tment , Cl ien t s X and Y, a married couple,

were c i t i z e ns and r es iden t s of the United s t a t e s .

101. On o r about Apri l 8, 2002, Singenberger opened an

undeclared account a t WEGELIN, th e defendant , fo r Cl ien t s X and

Y in the name o f Berry Trus t , a sham Liech tens t e in foundat ion .

At o r about t h a t t ime, WEGELIN accep ted a Form A s t a t i n g t h a t

Clients X and Y b e n e f i c i a l l y owned th e Berry Trust account . At

o r about t h a t t ime, WEGELIN accepted ano ther bank form f a l s e l y

dec la r ing t ha t Berry Trust b e n e f i c i a l l y owned th e Berry Trust

account . At th e top of t h i s f a l s e form, th e l e t t e r s "BNQ" were

wri t t en to ensure t h a t t h i s account was c o r re c t l y coded in

WEGELIN's computer system as an undeclared account .

102. In o r about 2003, Singenberger opened a second account

fo r C l i en t X, a t WEGELIN, the defendan t , t h i s t ime in th e name

of Asse t Champion, Ltd . , a sham Hong Kong corpora t ion .

103. Therea f t e r , u n t i l in o r about 2009/ Singenberger

managed th e a s se t s held by Cl ien t s X and Y a t WEGELIN, th e

42



defendant . On o r about December 31, 2003, the combined value of

these undeclared accounts was approximately $6,133,000.

Client Z

104. Singenberger a l so managed the asse t s fo r an undeclared

account t ha t Cl ien t Z, a co-consp i ra to r not named as a defendant

here in , held a t WEGELIN, the defendant . At a l l t imes r e levan t

to t h i s Indictment , Cl ien t Z was a U.S. c i t i zen and res iden t .

105. On o r about October I , 2004, Singenberger opened an

account fo r C l ien t Z a t WEGELIN, the defendant , in the name of

Eagle El i t e Investments , Ltd . , a sham Hong Kong corpora t ion . At

o r about t ha t t ime, WEGELIN accepted a Form A s t a t i ng t ha t

Cl ien t Z be ne f i c i a l l y owned the Eagle El i t e Investments account .

At o r about t h a t t ime, WEGELIN a l so accepted another bank form

fa l se ly dec la r ing t h a t Eagle El i t e Investments benef ic ia l ly

owned the account .

106. In o r about 2009, Cl ien t Z held approximate ly

$232,435 in h is undeclared account a t WEGELIN, the defendant .

107. Severa l U.S. t axpayer -c l i en t s whose undeclared

accounts a t WEGELIN, the defendant , were managed by independent

a s se t managers a re descr ibed in the fo l lowing t ab le . These U.S.

taxpayers d id n ot t imely r epor t t h e i r accounts a t WEGELIN (or

the income earned t h e re i n ) , to the IRS on Form 1040 o r the FBAR

where they were required to do so.

43



Code Name{s) o r Approx. Date Approx. High

Nominee Name(s) in WEGELIN Value of

Benef ic ia l which WEGELIN Account(s) WEGELIN

Owner(s) Account(s) Held Opened Account(s)

Kenneth Hel le r Nathelm Corp. 12/2005 $18,466,686

Berry Trus t , Asse t

Cl ien t s X & y Champion Ltd 4/10/2002 $6,133,000

Eagle El i t e

Cl i en t Z Investments Ltd . 10/1/2004 $232,435

Cl i en t AA Levina Trus t 4/10/2002 $776,090

Cl i en t BB N 466 2005 $55,496.

NemC1"I'rust; Grand 2002;

Dynamic Inves t . ; Top 6/23/2003;

Cl ien t CC & DD Harbour Proper t i es 6/6/2005 $4,439,666

Floranova Foundat ion; 9/11/2003;Michael Reiss Upside In te rna t iona l 11/2008 $2,588,470

Tota l

The Repat r ia t ion o f Undeclared FundsThrough th e Stamford Correspondent Account


inc luding in o r about 2011, WEGELIN, the defendant , used i t s

Stamford Correspondent Account not on ly to help its own U.S.

t axpayer -c l i en t s r epa t r i a t e undeclared funds to th e United

Sta tes without de t ec t i on by the IRS but a l so to help U.S.

t axpayer -c l i en t s of a t l e a s t two o the r Swiss banks accompl ish

th e same unlawful ends . For example:

Cl ien t EE

109. At a l l t imes re l evan t to t h i s Indic tment , Cl ien t EE, a

co-consp i ra to r not named as a defendant here in , was a r es iden t

o f New Je r sey and a c i t i z en Of th e United S ta t e s .

110. In o r about 2008, Cl ien t .EE opened an undeclared

account a t WEGELIN, the defendant , and funded it through a

44



t r a n s fe r from Swiss Bank B, where he had held an undeclared

account s ince in o r about the 1980s. Cl ien t EE's new undeclared

account a t WEGELIN was managed by an independent a s s e t manager

in Switzer land ("Independent Asset Manager A") .

111. In o r about 2010, Cl ien t EE t r ave led to Afr ica fo r a

s a f a r i . To pay fo r th e s a f a r i , by arrangement with Independent

Asset Manager A, Cl ien t EE sen t a l e t t e r with no re tu rn address

from New Je r sey to Independent Asset Manager A in Switzer land.

The envelope con ta ined a s ing le piece o f paper on which Cl ien t

EE had wri t t en only th e amount of money Cl ien t EE needed to wire

to the s a f a r i company, namely, approximately $37,000. At o r

about t h a t t ime , Cl ien t EE sen t a second and separa te l e t t e r to

Independent Asse t Manager A con ta in ing only the wire t r a ns f e r

de t a i l s fo r the s a f a r i company's bank account in Botswana.

Thereaf te r , pursuan t to these i n s t ruc t ions , on o r about June 22,

2010, WEGELIN wired approximate ly $37,000 th rough th e Stamford

Correspondent Account to th e s a f a r i company's bank account in

Botswana.

112. In o r about December 2009, Cl ien t EE's undeclared

account a t WEGELIN, th e defendant , held approximate ly $847,844.

45



Client FF

113. At a l l t imes re l evan t to t h i s Ind ic tment , Cl ien t FF, a

co-consp i ra to r not named as a defendant he re in , was a r es iden t

of Connec t icu t and a c i t i z en of the United S ta t e s .

114. In o r about 2006, Cl ien t FF i nher i t ed funds held in an

undeclared account a t WEGELIN, th e defendan t .

115. On va r ious occas ions from in o r about 2007 up through

and inc lud ing in o r about 2011, WEGELIN wired a t o t a l o f

approximate ly $324,955 in increments l e s s than $10,000 through

th e Stamford Correspondent Account to Cl ien t FF in th e United

S ta t e s , as descr ibed in the t ab le accompanying paragraph 137.

116. On o r about December 31, 2008, Cl i en t FF's undeclared

account a t WEGELIN, th e defendant , held approximate ly $637,395.

Client GG

117. At all t imes re l evan t to t h i s Ind ic tment , Cl ien t GG, a

co-consp i ra to r not named as a defendant he re in , was a r es iden t

of Westches te r County, New York, and a c i t i zen o f th e Uni ted

S ta t e s .

118. In o r around 2006, Client GG t r an s fe r r ed undec la red

funds t ha t he had held a t a Swiss bank s ince in o r about th e

ear ly 1990s to a new undeclared account a t WEGELIN, the

defendant . The new undeclared accoun t was held in th e name of

Birkdale Universa l , S.A. , a sham en t i t y es t ab l i s hed under the

46



laws o f Panama (the "Birkdale Account") . Cl ien t GG's Cl ien t

Advisor was URS FREI, th e defendant . FREI expla ined to Cl ien t

GG t h a t th e purpose of p lac ing the asse t s in th e name o f

Birkdale was to fu r t h e r conceal Cl ien t GG's ownership o f the

funds . La te r , when Cl ien t GG discussed the U.S. government 's

i nves t iga t ion o f UBS with FREI, FREI sa id t ha t because WEGELIN

had no of f i c e s ou ts ide SWitzer land, WEGELIN was l e s s vulnerable

to U.S. law enforcement pressure than UBS.

119. In add i t ion , C l ien t GG mainta ined tw o "dec la red

accounts" a t WEGELIN - t h a t i s , accounts t h a t were known to the

IRS because Cl ien t GG had submit ted a Form W-9 to WEGELIN,

causing WEGELIN to f i l e a Form 1099 with the IRS each yea r

r epor t ing th e income earned in the accounts .

120. In o r about August 2007, WEGELIN and URS FREI, th e

defendants , used th e Stamford Correspondent Account to conceal

FREI's unlawful hand de l ivery o f approximate ly $16,000 in U.S.

currency to another FREI U.S. t ax p ay e r - c l i en t ("FREI 's Other

Cl ien t " ) . On o r about August 8 and August 9, 2007, WEGELIN and

FREI used th e Stamford Correspondent Account to wire

approximate ly $16,000 in t o t a l from one of Cl ien t GG'S declared

WEGELIN accounts to Cl ien t GG's U.S. bank account in Westchester

County. The $16,000 t r ans fe r was div ided in to two wires of

$8,000 on back- to -back days to fu r the r conceal th e t r ansac t ion .

47



Thereaf te r , a t FREI's reques t , Cl ien t GG withdrew approximate ly

$ ~ ~ , O O O in U.S. currency from h is Westchester County account .

On o r about August 21, 2007, Cl ien t GG ca r r ied t h i s $16,000 in

cash with him to a lunch meeting in Manhattan with FREI, again

a t FREI's r eques t . At the lunch, Cl ien t GG handed FREI an

unmarked envelope conta in ing the $16,000. During th e lunch, the

head wai te r informed FREI t ha t someone e l s e a t th e res t au ran t

wished to speak with him. FREI then excused himse l f from Cl ien t

GG, walked to th e o ther s ide of the res t au ran t , and met with

FREI's Other C l i en t fo r approximate ly 10 minutes . At o r about

t ha t t ime, FREI gave the Other Cl ien t th e cash - f i l l ed unmarked

envelope t h a t C l i en t GG had given to FREI moments e a r l i e r . FREI

then re turned to C l i en t GG and noted t h a t it was becoming

inc reas ing ly d i f f i c u l t to move funds out o f Swi tzer land , and

tha t , to do so , he employed t h i s technique o f t r ans fe r r ing cash

d i r e c t ly between h is c l i en t s . Therea f t e r , FREI cred i t ed

approximate ly $16,000 to Cl ien t GG's undeclared account a t

WEGELIN - - the Birkda le Account .

121. In o r about 2010, Cl ien t GG's u n d e c l a r e d ~ a c c o u n t a t

WEGELIN, the defendant , held approximate ly $898,652.

48



Client HH

122. At a l l t imes r e levan t to th i s Indictment , Cl ien t HH, a

co-conspira tor not named as a defendant he re in , was a r e s id en t

of Connect icut and a c i t i zen of the United S t a t e s .

123. Beginning i n o r about the 1990s, Cl ien t HH mainta ined

an undeclared account a t UBS. In o r about 2003, Cl ien t HH and

he r Swiss independent a s se t manager ("Independent A sse t Manager

B") t r a n s fe r r e d her UBS funds to an undeclared account a t

WEGELIN, the defendant .

124. On var ious occasions from in o r about 2003 up through

and inc luding in o r about 2009, Cl ien t HH t rave led to

Switzer land and withdrew funds from h er undeclared account a t

WEGELIN, the defendant , with the help of Independent Asse t

Manager B. Independent Asse t Manager B advised C l i en t HH not to

car ry more than $10,000 i n to the United Sta tes a t a n y o n e t ime.

125. On var ious occas ions from in o r about 2003 up to and

inc luding in o r about 2009, Independent Asset Manager B met

Cl ien t HH fo r dinner in Manhattan. When he d id SOL he sometimes

gave h er U.S. currency withdrawn from her undeclared account a t

WEGELIN, the defendant .

126. On var ious occasions from in o r about 2005 up through

and inc luding in o r about 2009, WEGELIN, th e defendant , i s sued

checks to C l ien t HH drawn on the Stanford Corresp,9ndent Account.

49



As se t fo r th in the t ab le accompanying paragraph 137, WEGELIN

i s sued mul t ip l e checks in th i s manner, each fo r l e ss than

$10,000 to fu r t h e r conceal Cl ien t HH's undeclared account , fo r a

t o t a l of approximate ly $79,500.

127. As o f December 2007, Cl ien t HH's undeclared account a t

WEGELIN, th e defendant , held approximately $177,095.

Client II

128. At a l l t imes re l evan t to t h i s Ind ic tment [ Cl ien t I I , a

co-consp i ra to r not named as a defendant here in [ was a r es iden t

of Arizona and a c i t i z e n of the United Sta tes .

129. Beginning in o r about 2010, Cl ien t I I mainta ined an

undeclared account a t Swiss Bank C.

130. In o r about 2010, Cl ien t I I asked h is c l i e n t adv isor

a t Swiss Bank C ("Swiss Bank C Client Advisor") to send him

seve ra l batches o f checks a t r egu la r i n t e rva l s , three checks a t

a t ime, each fo r l e s s than $5,000, payable to a company t ha t

Cl ien t I I con t ro l l ed ( "Cl ien t II's Company"). Cl ien t I I fu r ther

reques ted t h a t th e checks "be drawn in th e U.S. d o l l a r s on your

corresponding US bank" and noted t h a t th e checks would be cashed

over t ime.

131. Therea f t e r , from in o r about December 2010 up through

and inc lud ing in o r about March 2011, WEGELIN, the defendant ,

i s sued approximate ly f ive checks drawn on th e Stamford

50



Correspondent Account payable to C l ien t II's Company and

provided them to the Swiss Bank C Cl ien t Advisor , who, in tu rn ,

s en t them to Cl ien t I I in Arizona. WEGELIN i s sued the checks ,

which are s e t for th in th e t ab le accompanying paragraph 137, in

amounts l e s s than $5,000, fo r a t o t a l of $21,088.

132. As o f in o r about October 2010, Cl ien t II's undeclared

Swiss Bank C account held approximate ly $2,183,606.

Client JJ

133. At a l l t imes r e levan t to t h i s Indictment , Cl ien t J J , a

co-conspira tor n ot named as a defendant here in , was a res iden t

of Arizona and a c i t i z e n of the United Sta t e s .

134. Beginning in o r about the 1990s, Cl ien t J J mainta ined

an undeclared account a t Swiss Bank B. In o r about l a t e 2009,

Swiss Bank B informed him t ha t he had to close h is account . He

then t rave led to Swi tzer land and opened an undeclared account a t

Swiss Bank C with the help of the Swiss Bank C Cl ien t Advisor .

135. Thereaf te r , from in o r about October 2009 up through

and inc luding in o r about March 2011, WEGELIN i s sued f ive checks

drawn on th e Stamford Correspondent Account payable to Cl ien t

J J , each in th e amount of approximate ly $45,000, as s e t fo r th in

th e t ab le accompanying paragraph 137.

136. As of Ju ly 2011, Cl ien t J J ' s undeclared Swiss Bank C

account held approximate ly $6,700,000.

51



137. Cer ta in checks and wire t r ans f e r s t ha t WEGELIN, the

defendant , i ssued and executed through th e Stamford

Correspondent Account on behal f of U.S. taxpayers with

undeclared accounts a t WEGELIN, Swiss Bank C, and Swiss Bank D,

fo r a t o t a l of approximate ly $ l ,4 l7 ,626 , a r e l i s t ed in th e

fol lowing t ab l e . None of these U.S. t axpayers t imely repor ted

such accounts , o r the income earned t he re in , to the IRS on Form

1040 o r the FBAR where they were requi red to do so .

Check # Swiss bank where

(or Check/ Wire Undeclared U. S. t axpaye r ' swire) date Approx. amount U.S. taxpayer account wa s held

2184 3/10/2005 $ 5,621.00 Cl i en t KK Swiss Bank D

~ 2 1 7 4/20/2005 $ 5,000.00 Cl i en t HH WEGELIN

2252 6 /23 /2005 $ 9,367.00 Cl i en t KK Swiss Bank D


2399 1 / 9 / 2006 $ 32,250.00 Cl i en t KK Swiss Bank D

2423 2/7/2006 $ 26 ,675 .00 Cl i en t KK Swiss Bank D

24'48 3/15/2006 $ 7,570.00 Cl i en t KK Swiss Bank D





2635 11/8/2006 $ 5,000.00 Cl i en t HH WEGELIN2636 11/13/2006 $ 5,000.00 Cl i en t HH WEGELIN

2726 2/8/2007 .$ 8,730.00 Cl i en t KK Swiss Bank D

Wire 3 /30 /2007 $ 8,000.00 Cl i en t FF WEGELIN



Wire 8/8/2007 $ 8,000.00 Client GG WEGELIN

Wire 8/9/2007 $ 8,000.00 Cl i en t GG WEGELIN

3152 11 / l3 /2007 $ 5,000.00 Client HH WEGELIN


.Wire 4/1/2008 $ 2,000.00 Cl i en t FF WEGELIN

Wire 4 /15 /2008 $ 4,000.00 Client FF WEGELIN

Wire 5/1/2008 $ 2 , 000 . 00 ' Cl i en t FF WEGELIN

Wire 5 /15 /2008 $ 4,000.00 Client FF WEGELINWire 5 /30 /2008 $ 2,000.00 Cl i en t FF WEGELIN

3283 5 /30 /2008 $ 8,500.00 Client HH WEGELIN


Wire 7/1/2008 $ 2,000.00 Client FF WEGELIN


Wire 8/1/2008 $ 2,000.00 Cl i en t FF WEGELIN

52




(o r Check/ Wire Undeclared U.S. t axpaye r ' s

wire) da te Approx. amount U.S. t axpayer account was held



Wire 9/15/200$ $ 4,000.00 Cl i en t FF WEGELIN

Wire 10/1 /2008 $ 2,000.00 Cl i en t FF WEGELIN


Wire n / 14 / 2008 $ 4,OQO.00 Cl i en t FF WEGELIN

3416 n /25 /2008 $ 8,500.00 Cl i en t A WEGELIN

3417 n /25 /2008 $ 8,500.00 Cl i en t A WEGELIN

3418 n / 25 / 2008 $ 8,500.00 Cl i en t A WEGELIN

3421 n /28 /2008 $ 8,500.00 Cl i en t HH WEGELIN

Wire 12/:)../2008 $ 2,000.00 Cl i en t FF WEGELIN



3468 1/5 /2009 $ 8,500.00 Cl i en t A WEGELIN

3469 1/5 /2009 $ 8,500.00 Cl i en t A WEGELIN

3470 1/5 /2009 $ 8,500.00 Cl i en t A WEGELIN

Wire 1/6 /2009 $ n ,ooo .OO Cl i en t A WEGEL IN


3483 1/26/2009 $ 8,500.00 Cl i en t HH WEGELIN



3510 2 /26 /2009 $ 8,500.00 Cl i en t A WEGELIN

3512 2/26/2009 $ 8,500.00 Cl i en t A WEGELIN

3511 2/26/2009 $ 8,500.00 Cl i en t A WEGEI..IN 4







Wire 4/21/2009 $ 20,000.00 Cl i en t A WEGELIN

3552 4/21/2009 $ 8,500.00 Cl i en t A WEGELIN

3553 4/21/2009 $ 8,500.00 Cl i en t A WEGELIN

3554 4/21/2009 $ 8,500.00 Cl i en t A WEGELIN






Wire 6/1 /2009 $ 2,000.00 Cl ien t FF WEGELIN

3571 6/8 /2009 $ 10,000.00 K. Hel l e r WEGELIN




3592 7/8 /2009 $ 2,500.00 K. Hel l e r WEGELIN

3583 7/8/2009 $ 2,500.00 K. Hel l e r WEGELIN

3587·· 7/'(5/2009 $ 2,500.00 K. Hel l e r WEGELIN

3586 7/8/2009 $ 2,500.00 K. Hel l e r WEGELIN

3589 7/8 /2009 $ 2,500.00 K. Hel l e r . WEGELIN

53




(or Check/ Wire Undeclared u . s . t axpayer ' s

wire) da te Approx. amount U.s . taxpayer account was held

3590 7/8/2009 $ 2 ,500 .00 K. Hel ler WEGELIN

3588 7 /8 /2009 $ 2,500.00 K. H el le r WEGELIN

3591 7/8/2009 $ 2,500.00 K. Hel ler WEGELIN

3593 7 /8 /2009 $ 2 ,500 .00 K. Hel ler WEGELIN

3595 7/8/2009 $ 2 ,500 .00 K. Hel ler WEGELIN3585, ..•. ' 1 : i _ 8 i : / ; , Q O ~ .. <:$ -- - 2 . , a . O Q _ ~ 9 Q K. Hel ler WEGELIN.

3584 7/8/2009 $ 2!500 .00 K. Hel ler WEGELIN

Wire 7/13/2009 $ 24,000.00 Client A WEGELIN

Wire 7/15/2009 $ 4 ,665 .00 Client FF WEGELIN

3623 7/16/2009 $ 2 ,500 .00 K. Hel ler WEGELIN

Wire 7/20/2009 $ 24,000.00 Client A WEGELIN

Wire 7/31/2009 $ 3,500.00 Client FF WEGELIN.


3660 8/25/2009 $ 5 ,500 .00 Client A WEGELIN

3659 8/25/2009 $ 8 ,500 .00 Cl ien t A WEGELIN

Wire 9/1/2009 $ 3 ,500 .00 Cl ien t FF WEGELIN

3736 9/11/2009 $ 37,813.97 K. Hel ler WEGELIN

Wire ~ / 1 5 / 2 0 0 9 $ 20,000.00 Client A WEGELIN

Wire ~ f j 1 5 / 2 0 0 9 $ 4 ,665 .00 Client FF WEGELIN

3747 9/22 /2009 $ 25,000.00 K. H el le r WEGELIN

3746 9/22/2009 $ 50,000.00 K. Hel ler WEGELIN

3745 9/22 /2009 $ 50,000.00 K. H el le r WEGELIN

3744 9/22 /2009 $ 50,000.00 K. Hel ler WEGELIN

3750 9/24/2009 $ 16,000.00 K. Hel ler WEGELIN

Wire 10 /1 /2009 $ 3 ,500 .00 Client FF WEGELIN

3778 10/2/20.09 $ 7,250.00 K. Hel ler WEGELIN

3779 10 /2 /2009 $ 500.00 K. Hel ler WEGELIN

3794 10 / 13 / 2009 $ 2 ,498 .04 K. Hel ler WEGELIN


3796 10/21/2009 $ 45,000.00 Cl ien t JJ Swiss Bank C







3926 1/22/2010 $ 45,000.00 Client JJ Swiss Bank C




·Wir-e 3 /9 /2010 $ 100,OOO.0C} F ~ ~ i . a t A, WEGELIN



4060 4 /6 /2010 $ 45,000.00 Cl ien t JJ Swiss Bank C





Wire 6/15 /2010 $- 4 ,665 .00 Client FF WEGELIN

54




(or Check/ Wire Undeclared U.s . t axpayer ' s

wire) date Approx. amount U.S. t axpayer account was held

Wire 6/22 /2010 $ 37,000.00 Cl ien t EE WEGELIN

Wire 7/15 /2010 $ 4,665.00 Cl ien t FF WEGELIN

Wire 8/13/2010 $ 4,665.00 Cl ien t FF WEGELIN

Wire 8/13/2010 $ 7,358.00 Cl ien t EE WEGELIN

Wire ·8 /18/2010 $ 18,910.00 Cl ien t EE WEGELINWire 9/15 /2010 $ 4 ,665 .00 Cl ien t FF WEGELIN



4361· !<" 1219 (2"OiO $ 4,833.00 Cl ien t I I Swiss Bank C

4363 12/10 /2010 $ 4,922.00 Cl ien t I I Swiss Bank C


Wire 1 /14 /2011 $ 4,665.00 Cl ien t FF WEGELIN

4411 1 /25 /2011 $ 45,000.00 Cl ien t JJ Swiss Bank C

4416 1 /28 /2011 $ 3 ,600 .00 Cl ien t I I Swiss Bank C

4417 1 /28 /2011 $ 2,850.00 Cl ien t I I Swiss Bank C

.W!:r6 a{1$f2t111· . --~ 4 ; o o ~ . 00 Cl ien t FF -WEGELIN


4483 3/17/2011 $ 4 ,883 .00 Cl ien t I I Swiss Bank C

4489 3/23/2011 $ 45,000.00 Cl ien t JJ Swiss Bank C






TOTAL $ 1,417,626.01

Statutory Allegat ions

138. From a t l e a s t in o r about 2002 up through anq

i nc lud ing in o r about 2011, in the Southern. D i s t r i c t of New York

and elsewhere , WEGELIN, MICHAEL BERLINKA, URS FREI, and ROGER

KELLER, th e defendants , t oge the r with Managing Par tne r A,

Execut ive A, Cl ien t Advisor A, Beda Singenberger , Gian Gis le r ,

Cl ien t s A through J J , and o ther s known and unknown, w i l l f u l l y

and knowingly d id combine, conspi re , confedera te , and agree

t oge the r and with each o t h e r to def raud th e United St a t e s o f

America and an agency thereof , to wit , the IRS, and to commit

55



offenses ag a in s t the United Sta tes , to wit , v i o l a t i o n s of Ti t l e

26, United S ta t e s Code, Sect ions 7206(1) and 7201.

139. It was a p a r t and an objec t of the consp i racy t ha t

WEGELIN, MICHAEL BERLINKA, URS FREI, and ROGER KELLER th e

defendants , toge ther with othe rs known and unknown w i l l fu l l y

and knowingly would and d id defraud th e uni t ed Sta tes o f America

and th e IRS fo r the purpose o f impedingl impai r ing , obs t ruc t ing l

and de fea t ing the l awfu l governmental func t ions o f the IRS in

the ascer ta inment computa t ion , assessment , and c o l l e c t i o n of

revenue, to wit , f edera l income t axes .

140. It was fu r t h e r a p a r t and an ob jec t o f the conspiracy

t h a t var ious U.S. t axpayer -c l i en t s o f WEGELIN, MICHAEL BERLINKAI

URS FREI, and ROGER KELLER, the defendants , toge ther with others

known and unknown, w i l l f u l l y and knowingly would and d id make

and subscr ibe r e tu r n s , sta tements and o ther documents, which

contained and were ve r i f i e d by w r i t t en d ec l a r a ti o n s t h a t they

were made under th e pena l t i e s of pe r ju ry , and which these U.S.

t axpayer -c l i en t s , toge ther with othe rs known and unknown, d id

no t be l i eve to be t rue and co r r ec t as to every mate r i a l mat te r ,

in v io la t ion o f Ti t l e 26, United Sta tes Code Sect ion 7206(1).

141. It was fu r t h e r a p a r t and an ob jec t o f th e conspiracy

t h a t WEGELIN, MICHAEL BERLINKAI URS FREI, and ROGER KELLERr the

defendants , t oge the r with othe rs known and unknown, w i l l fu l l y

56



and knowingly would and d id at tempt to evade and defea t a

su b s t a n t i a l p a r t of the income tax due and owing to th e United

S ta t e s by c e r t a in o f WEGELIN'S U.S. taxpayer c l i en t s , in

v i o l a t i o n of Ti t l e 26, United Sta tes Code, Sect ion 7201.

Overt Acts

142. In fur therance of the conspiracy and to e f f e c t i t s

i l l e g a l ob jec t s , WEGELIN, MICHAEL BERLINKA, URS FREI, ROGER

KELLER, the defendan t s , and others known and unknown, committed

th e fol lowing o v e r t a c t s , among o ther s , in th e Southern Di s t r i c t

o f New York and elsewhere:

a . In o r about September 2008, WEGELIN and BERLINKA

opened a new undeclared account in th e name of Cl ien t A.

b . On o r about November 25, 2008; January 5, 2009;

February 26, 2009; Apr i l 21, 2009; and August 25, 2009, WEGELIN

and BERLINKA s en t mul t ip l e checks drawn on th e Stamford

Correspondent Account ' to Cl ien t A in the United St a t e s .

c . On var ious occasions from in o r about 2003 up to

and inc lud ing in o r about 2009, Independent Asse t Manager B met

Cl ien t HH fo r dinne r in Manhattan and gave her U.S. currency

withdrawn from h e r undeclared WEGELIN account .

d. On o r about August 8 and August 9, 2007, WEGELIN

and FREI wired approximate ly $16,000 in two t r ansac t ions to

Cl ien t GG's U.S. bank account in Westchester County.

57



e . On o r about August 21, 2007, a t a res t au ran t in

Manhattan, C l i en t GG provided approximate ly $16,000 in U.S.

currency to FREI, who then provided it to FREI's Other Cl ien t .

f . On o r about November 4, 2008, WEGELIN and KELLER

opened a new undeclared account in th e name of Cl ien t P 's son, a

r e s id en t of Manhattan, fo r the purpose of he lp ing Cl ien t P hide

asse t s and income from the IRS.

g.On o r about October 2, 2008, Kenneth Hel le r caused

h is employee to send, by fax and U.S. mail , i n s t ru c t i o n s from

Manhattan to WEGELIN d i r e c t i n g it to wire approximate ly $50,000

to an account t h a t HELLER con t ro l l ed in the United Sta tes .

h. On var ious da tes from in o r about 2006 up through

and inc luding i n o r about 2009, WEGELIN, BERLINKA, FREI, and

KELLER sen t Federa l Express packages r e l a t i ng to WEGELIN's U.S.

t axpayer -c l i en t bus iness to addresses in the United Sta tes ,

inc luding a Federa l Express package from WEGELIN to FREI a t a

h o te l in Manhattan on o r about August 14, 2007.

(Ti t l e 18, United Sta tes Code, Sect ion 371.)

FOREPERSON PREET BHARARA

United Sta tes Attorney

58



Form No. USA-33s-274 (Ed. 9-25-58)

UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA

-v -

WEGELIN & CO.,MICHAEL BERLINKA,URS FREI, and ..

ROGER KELLER,

Defendants.

18 U.S.C. § 371

A TRUE BILL

INDICTMENT

81 12 Cr. 02 (JSR)

PREET BHARARA

United States Attorney.

Foreperson.

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Wegelin Indictment

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