UPDATE 3-UBS client in NJ gets probation for tax evasion

By Jonathan Stempel

NEWARK, N.J., Jan 6 (Reuters) - A wealthy UBS AG client who pleaded guilty to failing to report $6.1 million in Swiss bank accounts was sentenced to five years probation, after providing the U.S. government substantial help in advancing a major criminal tax fraud probe.

Juergen Homann, 67, also must pay a $60,000 fine and perform 300 hours community service under orders by U.S. District Judge Stanley Chesler in federal court in Newark, New Jersey. At least five other UBS clients have pleaded guilty to tax violations in the past year in connection with the probe.

Homann, a German-born resident of Saddle River, New Jersey, had pleaded guilty on Sept. 25 to one count of failing to report to U.S. tax authorities the assets he had hidden.

'As an international businessman, I should have known better,' Homann told the judge at a sentencing hearing on Wednesday. 'I have to take the consequences.'

Homann had faced a possible sentence of five years in prison and a fine of $250,000 or twice the improper gains.

Chesler told Homann that probation was warranted in light of the 'substantial and significant assistance' he provided. He said this 'may open up substantial additional avenues of exploration' for the government to uncover hidden assets.

Among other UBS clients who have pleaded guilty, two received prison terms while a third got probation, court records show. Another two -- Roberto Cittadini of Bellevue, Washington, and John McCarthy of Malibu, California -- are to be sentenced on Jan. 8 and Jan. 28, records show.

Bradley Birkenfeld, the former UBS banker who is the main whistleblower in the case, is to begin a 40-month prison sentence on Friday.



'GREED'

Homann's sentence is the latest sanction against a UBS client as the United States cracks down on tax fraud.

It follows the Swiss bank's agreement last August to turn over the names of 4,450 wealthy American clients to U.S. tax investigators. Six months earlier, UBS had admitted to criminal wrongdoing for helping U.S. taxpayers hide accounts from the Internal Revenue Service, and accepted a $780 million penalty.

While concluding that Homann 'made some correct decisions' in coming forward to admit guilt and help the government, the judge faulted him for having 'betrayed his adopted homeland' with his crime.

'What you did here,' Chesler told Homann, 'is a calculated type of crime which can only be motivated by one thing: greed. You didn't need the money. You just wanted it.'

Homann's lawyer, Cynthia Eddy, declined to comment.



COOPERATION

Homann admitted to failing in 2007 to file a form known as an F-BAR for his UBS account in Switzerland, and failing to report the account on his income tax return. He also admitted to failing to report income earned on the account.

It is not illegal to hold funds abroad, but they must be reported for tax purposes.

Prosecutors also said Homann in 2005 hid $5 million by transferring the sum from an account he controlled at UBS, in the name ELM Finance Ltd, to a separate Hong Kong entity.

They said Homann worked with Swiss lawyer Matthias Rickenbach to set up ELM, and was persuaded not to tell the IRS about his holdings.

Rickenbach was indicted in August for conspiring to defraud the United States by helping people evade taxes.

Federal prosecutor Marc-Philip Ferzan, interviewed after the sentencing, called Homann's assistance 'very substantial, timely and significant. We take cooperation very seriously.'

The case is U.S. v. Homann, U.S. District Court, District of New Jersey, No. 09-00724.

(Editing by Matthew Lewis and Steve Orlofsky, Gary Hill) Keywords: UBS/HOMANN SENTENCING ([e-mail]; + 1 646 223 6317; Reuters Messaging: [e-mail]) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.