Another American UBS client receives heavy fine

10 March 2011

A US court has ordered a Seattle businessman to pay a $2.1 million tax penalty for concealing large sums in various UBS bank accounts.

Arthur Eisenberg first opened a bank account at UBS' Cayman Islands division in 1983, and later shifted the assets to an account in his own name at the Zurich parent bank.

In 2004, he moved the assets from that account to a new UBS account in the name of a sham Hong Kong company he had formed, East West Universal Limited.

The contents of Eisenberg's various accounts grew from $3.1 million at the end of 2004 to $4.2 million by 2007. In 2008 he closed the account and transferred the proceeds to another large Swiss bank headquartered in Zurich, who the Department of Justice has not yet named.

Eisenberg admitted filing a misleading tax return and failing to submit a FBAR form disclosing his foreign accounts. He could have been jailed for up to three years, but was instead put on probation.

In another, unrelated, case, one Edward Gurary of Ohio has admitted to holding undeclared bank accounts with "significant assets" at both UBS and Credit Suisse.

Gurary held the UBS account between 2002 to 2008 in the name of a Bahamian company, Demko, the Department of Justice said. The balance ranged from half a million to nearly a million dollars, earning interest payments between $3,400 and $21,000.

According to the DoJ, he controlled the account by sending faxes, labelled with a code name, from a public bureau to UBS. These were then forwarded to Demko staff to make it look like Demko owned and controlled the account.

Sources

US Department of Justice (Eisenberg sentencing)

USDOJ (Eisenberg plea)

Dow Jones (Gurary plea)

USDOJ (Gurary charges)