(Bloomberg) -- A Swiss firm and five foreign bankers were charged in the U.S. with tax fraud conspiracy, with prosecutors alleging they helped three American taxpayers hide $60 million in assets by moving the money to other secretive jurisdictions. 

Prosecutors also announced that one of the bankers was arrested in Spain last month, and that one of the American taxpayers, Wayne Franklin Chin, pleaded guilty in secret in San Francisco federal court two years ago for his involvement in the scheme. Chin agreed to turn over $2.2 million hidden in Singapore banks. A lawyer for Chin didn’t immediately respond to a request for comment. 

In response to widespread concealment of American assets in Swiss banks, the U.S. launched an amnesty program more than a decade ago that allowed taxpayers to avoid prosecution by declaring hidden funds to the I.R.S., paying a fine and back taxes. Tens of thousands of Americans took advantage of the program, but a small fraction -- dubbed “leavers” by authorities -- instead moved money from Swiss accounts to other opaque locales, including Singapore and Hong Kong. 

As U.S. enforcement against Swiss banks ramped up with the prosecution of UBS Group AG in 2009, Swiss banks began encouraging clients with undeclared accounts to disclose them. But according to the charges announced Tuesday by federal prosecutors in Manhattan, bankers at Privatbank IHAG in Zurich approached a handful of high-value American clients and offered to help them keep their assets hidden.

They implemented a scheme dubbed the “Singapore Solution,” in which the funds were transferred through nominee accounts in other jurisdictions, and then repatriated to Switzerland in newly opened accounts nominally held by a Singapore-based asset manager. Later, when they perceived a growing risk of detection, they moved the funds back to Singapore. The financial firms and the bankers earned fees in exchange for their work.

Privatbank was not charged, but three of the bankers allegedly involved in the scheme were executives there. Prosecutors charged a separate Swiss financial firm, Allied Finance Trust AG, and two of its executives for conceiving the scheme and overseeing the funds.

The vast majority of the concealed assets cited in the case by prosecutors, almost $49 million, belonged to a Manhattan hedge fund manager identified in the indictment as “Client-1.” The account had actually been created by Client-1’s father in the 1960s, but passed to Client-1 upon the father’s death. After that, Client-1’s family accessed the funds through semi-annual trips to Zurich, where they would withdraw hundreds of thousands of dollars in cash and carry or mail it back to the U.S.

The case is U.S. v. Bechtiger, 20-cr-497, U.S. District Court, Southern District of New York (Manhattan).

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