An executive of the holding company that owns Privatbank IHAG pleaded guilty yesterday to conspiring to conceal over $60 million of undeclared assets held by wealthy American clients of the Swiss private bank.
According to court documents and statements made in court, from approximately 2009 to 2014, Daniel Wälchli, a member of the bank holding company’s executive board, worked with others to help Privatbank IHAG conceal the accounts of American customers who did not want to disclose their Swiss bank accounts to the IRS. The scheme involved a number of steps designed to obscure these undeclared accounts by stripping them of any indicia of U.S. ownership. Known as the “Singapore Solution,” members of the conspiracy sent over $60 million dollars on “round trips” across the globe. The money was sent from Privatbank IHAG accounts in Switzerland to a bank in Hong Kong before returning to Privatbank IHAG in accounts held by a Singaporean asset manager owned and controlled by the Swiss bank’s holding company.
Pursuant to the terms of his plea agreement, Wälchli will not dispute that the tax loss was $531,524, and he agrees that a sentencing enhancement for “sophisticated means” is appropriate.
Wälchli faces a maximum penalty of five years in prison. He also faces a period of supervised release and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Damian Williams for the Southern District of New York made the announcement.
IRS-Criminal Investigation is investigating the case.
Senior Litigation Counsel Nanette Davis and Trial Attorney Christopher Magnani of the Justice Department’s Tax Division and Assistant U.S. Attorney Olga Zverovich of the Southern District of New York are prosecuting the case.
