U.S. Offshore Tax Scheme Case Sees Two Swiss Bankers Plead Not Guilty

Two Swiss bankers from Zuercher Kantonalbank (ZKB) have pleaded not guilty to charges they conspired to help United States clients and others hide more than $420 million in offshore accounts from U.S. tax authorities.

Stephan Fellmann, 52, and Christof Reist, 58, who live in Switzerland, entered their pleas in federal court in Manhattan after agreeing to face charges contained in an indictment that has been pending since 2012.

Each of these men were charged in one of several cases against Swiss bankers and their employers stemming from a U.S. crackdown on offshore tax evasion by wealthy Americans utilizing undeclared Swiss bank accounts.

Fellmann and Reist were previously outside U.S. authorities’ reach while they were living in Switzerland. Both men voluntarily agreed to face the charges, Assistant U.S. Attorney Noah Solowiejczyk said in court.

U.S. Magistrate Judge James Cott released both men on $150,000 bonds and ordered them to remain in New York. Prosecutors in court said they were in talks with the defendants about resolving the case.

Lawyers for both men either declined comment or did not respond to a request for comment.
Representatives for ZKB did not immediately respond to a request for comment. Earlier this year, the bank’s annual report said it was cooperating with authorities and working toward a settlement.
The indictment said that from 2003 to 2009, more than 190 U.S. taxpayer clients of ZKB conspired to conceal accounts at the bank from the U.S. Internal Revenue Service to evade taxes.

Prosecutors said Fellmann, Reist, co-defendant Otto Huppi and other client advisors at ZKB conspired to hide at least $423 million in assets from the IRS.  Fellmann, who worked at the bank since at least 2008, personally managed $104 million in undeclared U.S. assets; Reist, who worked there since at least 2003, personally managed $5.4 million in such assets, the indictment said.
Both men helped clients open and maintain undeclared accounts using codenames or in the names of sham entities and ensured that mail relating to the accounts was not sent to their American clients in the United States,