Former UBS Banker Gadola Avoids Prison in Florida for Helping Tax Cheats
By David Voreacos and Susannah Nesmith – Nov 18, 2011 10:35 AM ET
Former UBS AG (UBS) banker Renzo Gadola, who aided Americans in cheating U.S. tax authorities before helping prosecutors snare other bankers, avoided prison when a judge sentenced him to five years of probation.
U.S. District Judge James Lawrence King rewarded Gadola today in Miami, citing “the extensive cooperation you have rendered to the United States.” He faced from 10 to 16 months in prison under advisory guidelines.
Gadola pleaded guilty Dec. 22, admitting he serviced hundreds of secret Swiss bank accounts while working from 1995 to 2008 at UBS and later as an asset manager.
Prosecutors sought leniency for Gadola, who helped build cases against two other bankers charged in the U.S. crackdown on offshore tax evasion.
Gadola also will help in future grand jury probes and testify against former customers and colleagues, prosecutors wrote to the judge.
Gadola was willing to give “information and answer questions about his U.S. customers who used secret Swiss bank accounts to evade their income taxes as well as the Swiss bankers and Swiss financial advisors who aided and abetted those U.S. customers,” prosecutors wrote.
Gadola was arrested on Nov. 7, 2010, after U.S. authorities secretly recorded him in a Miami hotel talking to a client about ways to hide money from the Internal Revenue Service.
Within days, he helped record phone calls with U.S. customers who held secret Swiss bank accounts, according to prosecutors.
Gadola is among 21 bankers, lawyers and advisers charged in a U.S. crackdown on offshore tax evasion. He was the first accused of discouraging taxpayers from joining an IRS program to avoid prosecution by voluntarily disclosing their accounts. Three dozen taxpayers also were charged.
About 30,000 U.S. taxpayers disclosed their accounts to the IRS since 2009, when UBS AG (UBSN), the biggest Swiss bank, was charged with helping Americans hide assets from the IRS. UBS avoided prosecution by admitting it fostered tax evasion, paying $780 million and handing over data on 250 secret accounts. It later disclosed another 4,450 accounts.
After his arrest, Gadola gave the U.S. valuable evidence that led to criminal charges against bankers Martin Lack and Christos Bagios, according to prosecutors.
North America Director
Lack was an executive director of the UBS North America International business until 2003, when he set up an asset management company in Zurich, according to prosecutors.
He was indicted Aug. 2 on a charge of conspiring to help Americans evade taxes by hiding accounts in a smaller Swiss regional bank. Lack, a Swiss resident and independent investment adviser, hasn’t responded in court and is considered a fugitive by prosecutors.
Bagios was charged in January with helping 150 American clients hide as much as $500 million in assets from the IRS when he worked at UBS, where he spent more than 15 years. He later worked for Credit Suisse Group AG. A Greek citizen who lived in Switzerland, he has been free on bail.
The case is U.S. v. Gadola, 10-cr-20878, U.S. District Court, Southern District of Florida (Miami).
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