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US banking business details revealed by Weil trial witness

Raoul Weil, a former top executive at UBS, is accused of helping thousands of US citizens hide money in secret accounts AP
This content was published on October 15, 2014 - 21:07
swissinfo.ch and agencies

Private business cards, hotel meetings and encrypted hard drives – just some of the details of how UBS dealt with its US clients, according to Hansruedi Schumacher, a witness called to court on Wednesday in the trial of a former UBS top banker, Raoul Weil.

Schumacher, who also has a case pending against him, was head of the bank’s North American business up until 2002. He is giving evidence for the prosecution as Weil, the former head of UBS's wealth-management division, is tried for conspiracy to commit tax fraud.

The court in Florida heard from Schumacher that internally at UBS, US accounts were spoken of in terms of being ‘black or ‘white’. ‘Black’ or ‘simple’ if the money in the account would not have taxes paid on it, and ‘white’ or ‘complex’ for accounts which would have to have the tax documents filled out.

Schumacher told the jury how Swiss banking secrecy worked and how profitable a Swiss account was for US clients, as they could pocket 100% of their stock market gains. In the US, he added, they would have had to give up 30% of the money in taxes.

“Those who want to see Mickey Mouse, go to Disneyland. Those who want secret banking transactions, go to Switzerland," Schumacher said.

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Preparing for US trips

Weil’s former subordinate described how he and his client advisors conducted business in the US, taking security precautions in advance.

They were given ‘private business cards’ by the bank without the UBS logo or name, he claimed. All that was printed on them was the name of the advisor, their telephone number and home address.

Schumacher said they met clients in hotels and worked on computers with encrypted hard drives.

After being questioned by the federal prosecutor, Schumacher was cross-examined by the defence.

Weil’s lawyers portrayed Schumacher as a part of a small, mischievous group of bankers who broke the bank’s rules and US law in their thirst for financial gain and power.

The case is expected to last three to four weeks. Weil denies wrongdoing.

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