Ex-Credit Suisse Client, 83, Admits Hiding $5.7 Million
By Patricia Hurtado and David Voreacos – Aug 21, 2012 12:01 AM ET
An 83-year-old Massachusetts man who held Swiss bank accounts at Credit Suisse Group AG (CSGN) and Wegelin & Co. pleaded guilty to hiding $5.7 million from U.S. tax authorities.
Jacques Wajsfelner admitted in federal court in Manhattan yesterday that he failed to file Foreign Bank and Financial Accounts Reports. He will pay civil penalties of $2.84 million and restitution of $419,940. Under advisory guidelines, he faces 30 months to 37 months in prison at sentencing on Dec. 20.
Since 2009, U.S. prosecutors have charged about 50 U.S. taxpayers and more than 20 offshore bankers, lawyers and advisers with tax crimes. Wajsfelner was born in Germany and fled the Nazis as a teenager, according to Jeffrey Denner, his attorney. He became a U.S. citizen and worked in real estate and advertising in New York and Boston, Denner said.
A sign hangs above the entrance to Credit Suisse Group AG’s headquarters in this photo taken with a tilt-shift lens in Zurich. An 83-year-old Massachusetts man who held Swiss bank accounts at Credit Suisse Group AG and Wegelin & Co. pleaded guilty to hiding $5.7 million from U.S. tax authorities. Photographer: Gianluca Colla/Bloomberg
“He pleaded guilty to some very bad judgment that he exercised,” Denner said in a telephone interview. “We are hopeful at his sentencing that the very serious mitigating factors of his life will be considered by the court.”
Wajsfelner’s former Swiss adviser, Beda Singenberger, was indicted last year on a charge of conspiring to help more than 60 U.S. taxpayers hide $184 million from the Internal Revenue Service in offshore accounts.
Wegelin, the 270-year-old Swiss bank, was indicted Feb. 2 on charges of helping U.S. taxpayers hide more than $1.2 billion from the IRS. Credit Suisse, the second-largest Swiss bank, said in July 2011 it was a target of a U.S. criminal probe. On July 21 of that year, seven of its current and former bankers were indicted on charges of helping U.S. clients evade taxes through secret accounts.
“Over and over again, we see people who are privileged to live in this country evading their legal obligation to pay their fair share of taxes,” U.S. Attorney Preet Bharara said in a statement.
Wajsfelner admitted that he held an account in his own name at Credit Suisse in 1995, and Singenberger helped him open one there in 2006 in the name of Ample Lion Ltd. At the end of 2007 the account held almost $5.7 million, court records show.
After Credit Suisse began exiting its U.S. cross-border banking business in 2008, Wajsfelner transferred his assets to Wegelin, opening an undeclared account, he admitted. His account was valued at almost $5.5 million at the end of 2010, and almost $4 million at the end of 2010, court papers show.
He admitted failing to file FBARs for six years, from 2006 to 2011, court records show.
“I knowingly and willfully failed to file FBARs with the IRS which would have disclosed the existence” of the Wegelin account, he told U.S. District Judge Naomi Reice Buchwald. ‘I knowingly failed to pay taxes to and on the funds in these accounts.”
The judge, who released Wajsfelner on a $50,000 recognizance bond, ordered him to remain in the continental U.S. and to surrender three weapons he said he owns — a 12-gauge shotgun, a snub-nose .38 revolver and a Smith & Wesson .38 magnum revolver.
Wajsfelner lives in Weston, Massachusetts. His first wife died after more than 49 years of marriage, Denner said. He has remarried.
In Wajsfelner’s plea agreement, prosecutors said they wouldn’t charge him for lies he told IRS agents after flying to the U.S. from Germany on Sept. 15, 2011.
He falsely said he didn’t know Singenberger, he didn’t have an account at Credit Suisse, he never heard of Ample Lion, and he didn’t have a foreign bank account at the time of the interview, according to the plea agreement.
“There are good explanations for it all,” Denner said. “There was some level of miscommunication and misunderstanding.”
The case is U.S. v. Jacques Wajsfelner, U.S. District Court, Southern District of New York (Manhattan).
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