On Tuesday, November 21, a jury acquitted Bank Frey executive Stefan Buck of conspiracy to commit criminal tax evasion in the Southern District of New York. The case is captioned United States v. Edgar Paltzer and Stefan Buck, No 1:13-cr-00282-JSR (S.D.N.Y.).
In April 2013, an indictment was filed against Buck and a co-conspirator, Edgar Paltzer, alleging a criminal conspiracy whereby Buck, the head of private banking at Bank Frey, and Paltzer, a US citizen and lawyer, conspired with US taxpayers to move funds out of Swiss banks under investigation in the US, including Wegelin. The alleged criminal conduct included arranging for cash withdrawals and purchases of jewelry, opening new undeclared accounts, and filing false statements of beneficial ownership, among other actions.
Buck is one of a group of Swiss bankers who have been indicted in the US for similar conduct since 2009; however, most of these individuals remain fugitives. Buck’s trial is notable for this reason. In October 2016, Buck traveled to New York to answer the charges directly, and his trial began in October 2017. Buck’s co-conspirator Edgar Paltzer testified against him at trial, along with a number of Buck’s former clients. Many of Buck’s clients subsequently entered the Internal Revenue Service’s Offshore Voluntary Disclosure Program, which we have written about previously here.
Pretrial motion practice in the case raised a number of noteworthy questions. For example, Buck unsuccessfully challenged the indictment on grounds of extraterritoriality, i.e., the scope of the US’s ability to prosecute foreign citizens for their actions abroad. The complete docket in the Buck case can be found here, behind a PACER paywall.
Buck’s acquittal signals another recent prosecutorial disappointment in criminal tax cases in the Southern District of New York. In November 2013, the prosecution on tax evasion charges of Denis Field, former CEO of BDO Seidman, also resulted in an acquittal, following on the heels of an initial guilty verdict that was overturned due to juror misconduct.