Raoul Weil, a former UBS AG banker, who headed their global wealth management group, was found not guilty yesterday by the federal jury in Fort Lauderdale, Florida. The jury reached its not guilty verdict after deliberating for a little over an hour.
Weil was indicted in 2008 on a charge of conspiring to help as many as 17,000 U.S. taxpayers hide more than $20 billion from the Internal Revenue Service in secret offshore accounts. Weil was arrested last year while vacationing in Bologna, Italy, and waived extradition. Based on the charges, Weil was facing up to five years in prison.
Government prosecutors argued that Weil knew that UBS used sham offshore corporate structures to help U.S. clients hide their money and identities from the IRS, and that UBS bankers used spy-like methods to deliver them cash and account statements, while trying to avoid detection by U.S. authorities. Prosecution relied on testimony of several former UBS bankers who chose to cooperate with U.S. authorities in exchange for favorable sentencing. Prosecutors argued to the jury that Weil knew what he was doing was wrong and orchestrated efforts by UBS to circumvent U.S. tax law.
Weil’s defense decided not to call him on the witness stand and did not call any witnesses, arguing that the government failed to prove its case. Weil’s attorneys argued in the closing argument that prosecutors failed to prove that Weil was part of a single conspiracy involving U.S. taxpayers. They also argued that Weil was unaware of the activities of a group of bankers below him. While the government presented plenty of evidence that bankers at UBS defrauded the IRS, including some who testified at the trial, it failed to show that Weil was personally and intimately involved in those schemes.
This is a second loss for the government in a matter of days in offshore tax conspiracy cases. On Friday, a federal jury in Los Angeles acquitted Shokrollah Baravarian, a former senior vice president at the local branch of Israel’s Mizrahi Tefahot Bank, of conspiring to help U.S. clients defraud the IRS through the opening of secret foreign bank accounts and fake loans. It appears that as a result of these decision, in future prosecutions, the government will have to rely on more than just testimony of alleged co-conspirators and, potentially, avoid broad conspiracy charges that are difficult to prove.
Former IRS Attorneys of Holtz, Slavett & Drabkin, APLC are ready to answer questions related to foreign bank accounts, FBAR reporting and Offshore Voluntary Disclosure Procedures. To schedule a consultation, please call (310) 550-6200.