TAX NEWS - June 2010

UBS Client Gets Conditional Discharge in New York Tax Case

Jules Robbins, a New Yorker who set up a sham company to conceal ownership of a UBS AG account in Zurich, received a conditional discharge after pleading guilty to breaking state tax laws, Manhattan District Attorney Cyrus Vance said.

Robbins, 83, paid $859,699 to New York state in taxes, interest and penalties and was sentenced yesterday in state court in Manhattan, Vance said in a statement.

Robbins, who owned New York companies that distributed watches, set up a sham Hong Kong corporation in 2000 with the help of a Swiss attorney and opened an account in the company's name at UBS, the statement said. At the end of 2007, the account had assets valued at $42 million.

"This office has long fought against the use of offshore accounts by tax cheats and other criminals," Vance said in the statement. "At a time when the city and state face severe fiscal shortfalls, we cannot afford to let wealthy citizens commit crimes by cheating on their taxes."

Robbins also pleaded guilty in federal court in April. His attorney, Martin Perschetz, declined to comment.

In February 2009, UBS entered into a $780 million deferred prosecution accord with the U.S. government and admitted the company helped U.S. taxpayers, including Robbins, hide accounts from the Internal Revenue Service. The Manhattan District Attorney's office is prosecuting them for false New York returns.


Civil Penalty

In his federal case, Robbins agreed to pay a $20.8 million civil penalty for failing to file reports of foreign bank or financial accounts.

Ernest Vogliano, 80, and Federico Hernandez, 44, two other New Yorkers charged with falsifying income tax returns by hiding assets in Swiss bank accounts, were arraigned in Manhattan criminal court on May 18, according to Vance. Hernandez, like Robbins, pleaded guilty in federal court in April. He agreed to pay a $4.4 million penalty. Vogliano also was indicted by federal prosecutors.

Nancy Kestenbaum, who represents Hernandez, and Richard Albert, who represents Vogliano, both declined to comment.