Former UBS Swiss bank account owner Harry Abrahamsen, a New Jersey resident, became the third former UBS client charged this year when he admitted in court that he concealed almost $800,000 in Swiss bank accounts and pleaded guilty to failure to file a Foreign Bank Account Report, Form TDF 90-22. 1 ( FBAR) for the calendar year 2005. Abrahamsen stated that he established an offshore company with the assistance of a Swiss lawyer and Swiss banker in order to hide these offshore financial accounts from the IRS. According to the Justice Department, he funded his accounts with $1.3 million in false and inflated expenses paid by his printing company to a Swiss company.
Abrahamsen faces as long as five years in prison when he returns to court for sentencing on July 27th, along with a fine of $250,000. He also agreed to pay taxes and interest, as well as a 50 percent FBAR civil penalty on the highest balance of his accounts. It is not clear whether he will also have to pay a 75% civil tax fraud penalty. Based upon the amounts disclosed in public documents the taxes and penalties will probably exceed 100% of the amount in his Swiss bank account.
UBS turned over data to the U.S. on Abrahamsen as part of its deferred-prosecution agreement. Had Abrahamsen made a voluntary disclosure to the IRS, it is possible he could have avoided his criminal tax problems.