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California Man Pleads Guilty to Offshore Banking Scheme Involving UBS in Switzerland

(Source: Department of Justice) - Christopher B. Berg of Portola Valley, Calif., entered a plea of guilty today before the U.S. District Court in San Jose, Calif., to an information charging him with willful failure to file the required report of foreign bank account (FBAR) for an account he controlled at UBS in Switzerland in the year 2005.

According to the information, in 1999, Berg began working as a consultant. In 2000, Berg met with Beda Singenberger, a Swiss financial consultant, and a vice president of banking at UBS in San Francisco regarding setting up a bank account at UBS in Switzerland to shelter a portion of his consulting income from taxation. Beginning in 2001 and continuing through 2005, funds representing $642,069 in compensation earned by Berg from consulting services were deposited by wire transfer to UBS accounts. Berg used the money in these accounts at UBS in Switzerland to purchase a vehicle, to obtain cash while in Europe, and to pay the balance on a Eurocard he used while traveling in Europe. Berg did not disclose the existence of his accounts at UBS in Switzerland to his certified public accountant, and did not disclose the income earned by these accounts or the consulting income deposited to the accounts. The tax harm associated with Berg?s conduct is $270,757.

Individuals who shirk their civic duty and evade taxes by hiding their income and assets in offshore accounts are making a very poor choice, said Kathryn Keneally, Assistant Attorney General for the Justice Departments Tax Division. They risk criminal prosecution and jail, still owe the taxes due and may lose most of those assets to severe civil penalties.

Those who hide their assets and income in offshore accounts should realize that there is no safe haven from the IRS, said Richard Weber, Chief Internal Revenue Service Criminal Investigation. Mr. Berg admitted he disregarded his legal responsibility to file the required report of a foreign bank account and report all his income and interest. He now faces substantial monetary penalties and the risk of incarceration. Combating offshore tax evasion continues to be one of the IRS top priorities.

United States citizens and residents who have an interest in, or signature or other authority over, a financial account in a foreign country with assets in excess of $10,000 are required to disclose the existence of such account on Schedule B, Part III, of their individual income tax returns. Additionally, U.S. citizens and residents must file an FBAR with the U.S. Treasury disclosing any financial account in a foreign country with assets in excess of $10,000 in which they have a financial interest, or over which they have signature or other authority.

Sentencing has been scheduled for July 8, 2013. Berg faces a maximum penalty of five years in prison and a fine of up to $250,000.

The case was investigated by IRS – Criminal Investigation and prosecuted by trial attorneys from the Tax Division.

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