Three former UBS executives were convicted of fraud charges by a federal jury in New York on Friday for their part in a scheme involving the bidding for contracts for the investment of municipal bond proceeds.This content was published on September 1, 2012 - 13:34
While employed at UBS, the three men participated in separate fraud conspiracies and schemes with various financial institutions between 2001 and 2006, the United States Department of Justice said.
Evidence at the trial established that the fraud cost municipalities and the US Treasury millions of dollars.
Friday’s conviction brings to 19 the number of people who have been convicted or pleaded guilty in relation to the municipal bonds investigation. The trial began on July 30 after the bankers were initially indicted in December 2010.
“For years, these executives corrupted the competitive bidding process and defrauded municipalities across the country out of money for important public works projects,” said Scott Hammond, deputy assistant attorney general of the Antitrust Division’s criminal enforcement programme.
“Today’s convictions demonstrate that the division is committed to holding accountable those who seek to unfairly and illegally undermine competitive markets,” he added.
According to evidence presented at trial, the former UBS managers corrupted the bidding process for more than a dozen investment agreements to increase the number and profitability of the agreements awarded to UBS.
At other times, while acting as brokers, the three and their co-conspirators arranged for UBS to receive kickbacks in exchange for manipulating the bidding process and steering investment agreements to certain providers.
The former bankers, who were found guilty on 11 counts of conspiracy and fraud, are now facing up to 30 years in prison and fines of $250,000 to $1 million per fraud conviction.
In May this year UBS admitted to anticompetitive conduct by former employees in the municipal bond investments market and agreed to pay $160 million to US federal and state agencies.
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