The Work

August 16, 2008 11:18 AM

UBS Banker Held by U.S. Government Returns to Switzerland

Posted by Julie Triedman

Martin Liechti, the Zurich-based head of the Americas for UBS's wealth management unit, has obtained permission to leave the United States after being held for four months on a material witness warrant. He had been detained in Miami for questioning by authorities in a widening tax evasion probe by the U.S. into UBS's services for wealthy Americans, according to the Wall Street Journal.

"We are pleased to report that Martin Liechti has resolved his status with the U.S. government and returned to Switzerland," said David Zornow, Liechti's lawyer. The Skadden, Arps, Slate, Meagher & Flom partner, head of the firm's white collar practice, has represented Liechti since his detainment in April. Zornow declined to say where his client has been detained or how permission for the banker to depart had been arranged. Zornow has been assisted on the matter by Skadden white collar defense partner Lawrence Spiegel; Jane Moscowitz of Miami's Moskowitz & Moscowitz served as Florida counsel..

On July 17, Liechti invoked his Fifth Amendment right when he was subpoenaed to testify before a U.S. Senate panel conducting hearings into offshore tax shelters. The Internal Revenue Service is trying to get its hands on a list of American clients who allegedly were helped by UBS to hide assets in offshore accounts, while the Justice Department is investigating just how far up the ranks at UBS involvement in the alleged evasion goes. It's unclear to what extent Liechti has cooperated. Liechti was detained before an indictment was filed against former UBS private banker Bradley Birkenfeld in May. Birkenfeld pled guilty on June 19 to charges that he helped a client hide assets from the IRS; he reportedly is cooperating with authorities.

The U.S. attorney's office in Ft. Lauderdale has been running the investigation into UBS's alleged tax evasion in conjunction with the Justice Department's tax division. Kevin Downing, a senior trial lawyer in the tax division, is said to be playing a lead role in the UBS investigation.

Downing's most recent claim to fame was helping prosecute 18 individuals in the KPMG criminal tax shelter trial in the Southern District of New York in 2006. As The American Lawyer reported last November, the trial of the former KPMG officials was tossed out by U.S. district court judge Lewis Kaplan last year, after the judge ruled that prosecutors violated due process when they pushed KPMG to stop paying its former employees' legal bills. That decision currently is on appeal.

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