U.S. Jury Clears Ex-UBS Manager In Tax Evasion Case

The courtroom victory of the only Swiss banker to beat the U.S. in a trial over offshore tax evasion may embolden other indicted financial workers to leave a legal limbo some have endured more than five years.

Twenty-five offshore bankers, lawyers and advisers have yet to answer U.S. Justice Department charges that they helped Americans evade taxes. Most live in Switzerland, where they remain off-limits to U.S. prosecutors because the country doesn’t extradite people for tax crimes. If they cross the border into another country, they risk arrest, and the U.S. charges have no expiration date.

Raoul Weil, 55, the former head of wealth management for UBS Group AG, was in similar straits until he was arrested in Italy last year after his indictment in 2008. After two months in an Italian jail, he waived extradition and went to the U.S. to face a charge that he conspired to help thousands of U.S. clients use Swiss banking secrecy to evade taxes.

Last month, after a three-week trial and almost a year of house arrest, Weil was acquitted by a Florida jury that needed only 85 minutes to deliberate. The verdict was a swift rebuke of a case against the highest-ranking offshore banker charged since the U.S. began cracking down on tax evasion in 2008.

A lawyer who defended Weil said his client’s victory may temper the zeal of prosecutors.

“It’s never easy to defeat the U.S. government,” Matthew Menchel, an attorney with Kobre & Kim LLP in Miami, said in an interview in Geneva. “The DOJ is going to be more careful scrutinizing its evidence before deciding to bring charges against someone.”