Michael Rubinstein a citizen of the US and resident of Boca Raton, Florida was the first UBS client arrested on Thursday by the Federal Authorities in his effort to conceal income from the IRS.
UBS admitted in February to conspiracy to defraud the I.R.S. by helping scores of wealthy Americans hide nearly $20 billion overseas.
The bank paid $780 million to settle the charges, but it remains under investigation, as do its American clients. The admission has helped to open the world of offshore banking and dealt a death blow to Swiss financial secrecy.
The arrest came as a result of client documents and data on Mr. Rubinstein that UBS turned over to federal authorities as part of the deal.
Dirt is under the rug>>
From the court Complaint Affidavit:
- There are UBS Swiss bank accounts in the name of Hybridge International, Ltd., ("Hybridge"), a British Virgin Island corporation that was incorporated on September 5, 2001. According to internal UBS documents, including the Form A, Verification of the Beneficial Owner's Identity, dated October 8, 2001, naming STEVEN MICHAEL RUBINSTEIN a beneficial owner of these UBS accounts in the name of Hybridge and listing his address in Boca Raton, Florida, in the Palm Beach County with the Southern District of Florida.
- For identification purposes, STEVEN MICHAEL RUBENSTEIN only provided UBS his South African passport.
- From 2001 through 2008, STEVEN MICHAEL RUBENSTEIN telephonically communicated with UBS bankers, among other things, directing the purchase and sale of United States securities, the conversion of investments from United States dollars to Great Britian Pounds, and the deposit and transfer of funds into and out of the accounts.
- From 2001 throgh 2008, STEVEN MICHAEL RUBENSTEIN personally met with UBS bankers to discuss his UBS Swiss bank accounts. These meetings took place at various locations, including Art Basel Miami, a shopping center in West Palm Beach, STEVEN MICHAEL RUBENSTEIN's personal residence, and vairous restaurants throughout South Florida. During these meetings, STEVEN MICHAEL RUBENSTEIN discussed with his UBS bankers, among other things, depositing assets with UBS, the purchase and sale of various investments, and withdrawing money from the UBS account to pay for the construction of his personal residence in Baca Raton, Florida, in Palm Beach County within the Sourthern District of Florida.
Rubinstein's UBS account is worth at least $6 million, including stocks and gold coins.
Federal authorities denied Rubinstein the opportunity to post bond, so instead of waiting in the comfort of his home for the bail bond hearing on Tuesday, he will spending that time in jail.
To date, UBS has turned over the names of 285 clients to the authorities.
"Today is the first of the prosecutions resulting from that disclosure, but it will not be the last," Alexander Acosta, U.S. Attorney for the Southern District of Florida, said in the statement announcing the charges against Rubinstein.
The government is pressing UBS to disclose the names of up to 52,000 US citizens who hold accounts. UBS has argued that the information is protected by the Swiss financial privacy laws.
Did UBS undermine their argument by information on 285 clients? Were the 285 known individuals given to the Feds because they already under suspicion or did UBS give them up because they were the top layer of sludge hiding the richer dirt underneath?