November 7, 2012 / 12:32 AM / 8 years ago

Ex-Swiss banker pleads guilty in tax dodging case

(Reuters) - A former Swiss banker pleaded guilty to fraud on Tuesday almost two years after the U.S. government placed him under limited home confinement as part of a long-running investigation of Swiss banks and American tax dodgers.

In federal court in Florida, Christos Bagios pleaded guilty to one count of conspiring to defraud the U.S. government of just over $1 million while employed at UBS AG UBSN.VX.

Judge Kenneth Marra sentenced Bagios to time already served, which included 37 days in prison before his confinement. Bagios, appearing in court in a gray pinstriped suit and black tie, avoided up to five years’ jail time and a $250,000 fine.

The 47-year-old Greek citizen and Swiss resident was formerly employed by both UBS and Credit Suisse Group AG CSGN.VX. After cooperating with federal investigators, he was expected to return to his family in Switzerland.

Bagios was arrested in New York in January 2011. At the time, he was a senior Credit Suisse banker. He was originally charged with helping 150 Americans hide up to $500 million from U.S. tax authorities while he worked at UBS for more than a decade through 2008.

The long-running investigation in which he became involved has thrown Swiss banking secrecy, enshrined in the Alpine republic’s laws and traditions, into jeopardy, with cash-strapped governments worldwide cracking down on tax evaders.

Bagios’s plea in the U.S. District Court for Southern Florida was a change from an earlier plea of not guilty.

Court papers cited Bagios’s assistance in the wide probe, saying he “provided cooperation and substantial assistance regarding his former colleagues and customers at UBS AG.”

A UBS spokeswoman could not immediately be reached for comment. Credit Suisse spokesman Jack Grone declined to comment.

With his new plea, Bagios became free for the first time in nearly two years to retrieve his passport and travel.


Matthew Menchel, Bagios’s attorney, said his client “is very relieved to get this part of his life over and looks forward to getting back to Switzerland and his wife and children.”

During his confinement, he had to wear an ankle bracelet, live in an apartment in Miami and restrict his movements to a small portion of south Florida.

At least 11 banks are under investigation by U.S. authorities. UBS, the largest Swiss bank, paid $780 million and entered into a deferred prosecution agreement, now ended, to settle charges by the U.S. government in 2009.

Credit Suisse, the second-largest Swiss bank, received a target letter last summer. Dozens of Swiss bankers and U.S. clients have been indicted.

Other banks under investigation include Zurich-based Julius Baer BAER.VX and some Swiss cantonal, or regional, banks along with UK-based HSBC Holdings (HSBA.L) and three Israeli banks, Hapoalim, Mizrahi-Tefahot Bank Ltd (MZTF.TA) and Bank Leumi (LUMI.TA). In February, Wegelin & Co., Switzerland’s oldest private bank, was indicted.


The Bagios case parallels that of Martin Liechti, a former UBS executive who in 2008 spent four months under confinement while hashing out a cooperation deal with authorities. But lawyers said Bagios’s lengthy confinement seemed unusual.

Robert Bennett, a lawyer who represented Democratic President Bill Clinton in the past, said it seemed unusual to confine someone for so long. Prosecutors said in court papers that Bagios had “demonstrated he is not a flight risk.”

Martin Lack, a former top UBS private banker who was indicted in August 2011, and Hansruedi Schumacher, a former banker at UBS and Neue Zurcher Bank in Zurich, are both fugitives from justice.

Bagios had repeatedly waived his right to be indicted after being arrested and later charged. Prosecutors said in court papers his conduct was “not as egregious as that of others.”

Reporting By Lynnley Browning and Kevin Gray; Editing by Kevin Drawbaugh, Howard Goller and Alden Bentley

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below