Boca Raton man pleads to UBS tax scheme

By Palm Beach Business.com

MIAMI — A Boca Raton man could serve as much as three years in prison after pleading guilty to filing a false tax return and hiding income through a Swiss bank account.

Steven Michael Rubinstein, an accountant who worked for an international yacht brokerage, admitted in court that he failed to disclose a personal account with Swiss banker UBS, which he used to funnel funds out of, then back into, the United States.

Rubinstein was the first American taxpayer prosecuted through an agreement between U.S. authorities and UBS to disclose the names of U.S. account holders who allegedly are using Swiss accounts to illegally evade taxes.

Court records said Rubinstein was the beneficial owner of UBS accounts in the name of Hybridge International Ltd., a British Virgin Island corporation. From 2001 through 2008, Rubinstein allegedly communicated with bankers at UBS about buying and selling securities worth more than 4.5 million Swiss francs, converting investments from U.S. dollars to British pounds, depositing and transferring funds into and out of the UBS Swiss accounts, and repatriating about $3 million into the U.S. to build a home in Boca Raton.

Additionally, Rubinstein deposited and sold more than $2 million in South African Krugerrands through his UBS Swiss bank accounts.

Rubinstein also failed to report the income he earned on any UBS Swiss bank accounts.

Specifically, Rubinstein admitted to filing a false tax return for tax year 2004.

In February, UBS admitted to helping U.S. taxpayers hide accounts from the IRS, and agreed to provide the identities of, and account information for, some U.S. customers.

“Today’s guilty plea resolves the first prosecution of a UBS client based upon records received from UBS pursuant to the historic deferred prosecution agreement executed earlier this year,” acting U.S. Attorney Jeffrey H. Sloman said. “More prosecutions are expected to follow, as we continue to hold accountable those who conceal money and assets in an effort to avoid their income tax obligations.”

Said IRS Commssioner Doug Shulman: “Combating offshore tax evasion by wealthy taxpayers continues to be one of the IRS' top priorities. The IRS is committed to vigorously pursuing those who illegally hide their money offshore as well as the financial institutions which help them.”

Sentencing has been set for September 30 before U.S. Judge Marcia G. Cooke at 11 a.m. Rubinstein faces a maximum sentence of three years in prison and a maximum fine of $250,000 or twice the amount the IRS lost.

Rubinstein remains free on a $12 million bail pending sentencing.