UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - x UNITED STATES OF AMERICA - v. - INDICTMENT 11 Cr. DANIELA CASADEI and FABIO FRAZZETTO, 11 CR Defendants. x COUNT ONE (Conspiracy) The Grand Jury charges: The Defendants and Their Bank 66 1. At all times relevant to this Indictment, Swiss Bank No. 1 provided private banking, asset management, and ,other;. services to individuals and entities around the world, including U.S. taxpayers in the Southern District of New York. Until in or about 2008, Swiss Bank No. 1 maintained an office the Southern District of New York. 2. From at least in or about the early 1990s, up through at least in or about 2010, DANIELA CASADEI, the defendant, worked at Swiss Bank No. 1 as a client advisor to various individuals, including U.S. taxpayers who maintained accounts at Swiss Bank NO.1. 3. From at least in or about 2005, up through at least in or about 2010, FABIO FRAZZETTO, the defendant, worked at 1
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - - - x
UNITED STATES OF AMERICA
- v. -INDICTMENT
11 Cr. DANIELA CASADEI and FABIO FRAZZETTO, 11 CR
Defendants. x
COUNT ONE (Conspiracy)
The Grand Jury charges:
The Defendants and Their Bank
66
1. At all times relevant to this Indictment, Swiss
Bank No. 1 provided private banking, asset management, and ,other;.
services to individuals and entities around the world, including
U.S. taxpayers in the Southern District of New York. Until in or
about 2008, Swiss Bank No. 1 maintained an office ~n the Southern
District of New York.
2. From at least in or about the early 1990s, up
through at least in or about 2010, DANIELA CASADEI, the
defendant, worked at Swiss Bank No. 1 as a client advisor to
various individuals, including U.S. taxpayers who maintained
accounts at Swiss Bank NO.1.
3. From at least in or about 2005, up through at
least in or about 2010, FABIO FRAZZETTO, the defendant, worked at
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Swiss Bank No. 1 as a client advisor to various individuals r
including U.S. taxpayers who maintained accounts at Swiss Bank
NO.1. Obligations of U.S. Taxpayers
With Respect to Foreign Financial Accounts
4. At all times relevant to this Indictment r
citizens and residents of the United States who had income in any
one calendar year in excess of a threshold amount ("U.S.
taxpayersll) were required to file a U.S. Individual Income Tax
Return r Form 1040 ("Form 1040 1l )r for that calendar year with the
Internal Revenue Service ("IRSII). On Form 1040 r U.S. taxpayers
were obligated to report their worldwide income r including income
earned in foreign bank accounts. In addition r when a U.S.
taxpayer completed Schedule B of Form 1040 r he or she was
required to indicate whether "at any time during [the relevant
calendar year] II the filer had "an interest in or a signature~or
other authority over a financial account in a foreign countrYr
such as a bank account r securities account, or other financial
account rll and if SOr the U.S. taxpayer was required to name the
country.
5. In addition r U.S. taxpayers who had a financial
interest inr or signature or other authority over a foreign bank
account with an aggregate value of more than $10 r OOO at any time
during a particular calendar year were required to file with the
IRS a Report of Foreign Bank and Financial Accounts r Form TD F
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90-22.1 ("FBAR") on or before June 30 of the following year. In
general, the FBAR required that the U.S. taxpayer filing the.form
identify the financial institution with which the financial
account was held, the type of account (either bank, securities,
or other), the account number, and the maximum value of the
account during the calendar year for which the FBAR was being
filed. Overview of the Conspiracy
6. From at least in or about the 1990s up through and
including in or about 2010, more than 180 U.S. taxpayer-clients
of Swiss Bank No. 1 conspired with, at various times, DANIELA
CASADEI and FABIO FRAZZETTO, the defendants, and others known and
unknown, including other client advisors at Swiss Bank No.1, to
defraud the United States, to conceal from the IRS on false tax
returns and otherwise the existence of bank accounts maintained
at Swiss Bank No.1, and. the income earned in these accounts'
(hereafter "the undeclared accounts"), and to evade U.S. taxes on
income generated in those accounts. CASADEI, FRAZZETTO and other
client advisors at Swiss .Bank No. 1 conspired with U.S. taxpayer
clients to hide at least $600,000,000 in assets from the IRS at
Swiss Bank No.1, and CASADEI and FRAZZETTO managed undeclared
U.S. taxpayer assets worth at least $13,200,000 and $20,500,000
respectively. In furtherance of the conspiracy, CASADEI and
FRAZZETTO, among other things, advised and helped U.S. taxpayer
clients open and maintain undeclared accounts in code names or in
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the names of non-U.S. relatives or.sham corporate entities;
ensured that mail relating to those accounts was not sent to U.S.
taxpayer-clients in the United States; caused U.S. taxpayer
clients to travel to Switzerland to conduct business relating to
the undeclared accounts; traveled to the United States to meet
with U.S. taxpayers; and, in or about 2008 and 2009, assured U.S.
taxpayer-clients not to worry about the undeclared accounts being
discovered by the IRS or U.S. law enforcement authorities
because, CASADEI and FRAZZETTO advised, un,like UBS AG - another
Swiss bank that was being investigated by U.S. authorities for
engaging in similar practices - Swiss Bank No. 1 did not have an
office in the United States and the accounts would therefore
remain secret.
Means and Methods of the Conspiracy
7. Among the means and methods by which DANIELA
CASADEI and FABIO FRAZZETTO, the defendants, and their
co-conspirators carried out the conspiracy were the following:
a. CASADEI, FRAZZETTO and other Swiss Bank No. 1
client advisors opened and managed for certain U.S. taxpayers
bank and securities accounts at Swiss Bank No. 1 that were not
reported to the IRS on Forms 1040, FBARs, or otherwise, and the
income from which was also not reported to the IRS.
b. CASADEI, FRAZZETTO and other Swiss Bank No. 1
client advisors permitted certain U.S. taxpayers to open
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undeclared accounts using code names or numbers so that the U.S.
taxpayers could sign their code names or numbers on bank
documents, rather than use their usual signatures, and otherwise
ensure that the U.S. taxpayers' names would appear on the fewest
possible documents relating to their accounts.
c. FRAZZETTO permitted certain u.s. taxpayer
clients to place assets in undeclared accounts held in the name
of foreign relatives in order to conceal the U.S. taxpayer
clients' beneficial ownership of such assets.
d. FRAZZETTO permitted a U.S. taxpayer-client to
maintain an undeclared account at Swiss Bank No. 1 held in the
name of a sham corporate entity, and CASADEI advised a U.S.
taxpayer-client that the client could maintain his undeclared
account at Swiss Bank No. 1 if he placed his account in the name
of a sham corporate entity.
e. CASADEI, FRAZZETTO and other Swiss Bank No. 1
client advisors ensured that account statements and other records
relating to undeclared accounts held at Swiss Bank No. 1 by U.S.
taxpayer-clients were not sent to their U.S. taxpayer-clients in
the United States.
f. CASADEI, FRAZZETTO and other Swiss Bank No.1
client advisors caused U.S. taxpayer-clients with undeclared
accounts at Swiss Bank No. 1 to travel from the United States to
Switzerland in order to discuss their undeclared accounts.
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g. FRAZZETTO traveled to the Southern District
of New York to review account information with certain U.S.
taxpayer-clients with undeclared accounts at Swiss Bank NO.1.
h. Various U.S. taxpayer-clients of CASADEI,
FRAZZETTO and other Swiss Bank No. 1 client advisors filed false
Forms 1040 that failed to report their interest in, and income
earned from, their undeclared Swiss Bank No. 1 accounts; evaded
income taxes due and owing; and failed to file FBARs identifying
their undeclared accounts.
A. Undeclared Accounts Opened or Managed by DANIELA CASADEI
8. From at least in or about the early 1990s up to in
or about 2010, DANIELA CASADEI, the defendant, in her capacity as
a client advisor at Swiss Bank No.1, opened new undeclared
accounts, or managed previously-opened undeclared accounts, for
at least seventeen U.S. taxpayer-clients hiding at least
$13,241,446 in total from the IRS at Swiss Bank NO.1. CASADEI's
U.S. taxpayer-clients included, among others, Clients 1 through
6, described below.
Client 1
9. At all times relevant to this Indictment, Client 1
was a U.S. citizen and resident of the United States. By in or
about the early 1990s, Client l's father had an undeclared
account at Swiss Bank No.1 (the "Account"). In or about the
early 1990s, Client 1 and Client l's father traveled to the
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zurich office of Swiss Bank No. 1 and met with DANIELA CASADEI,
the defendant, to sign documents that gave Client 1 signature
authority over the Account. Client 1 provided CASADEI a copy of
his U.S. passport during the meeting. CASADEI provided account
statements to Client 1 and Client l's father. CASADEI referred
to these statements as "traveling, statements" because they
contained no client-identifying information on them.
10. On or about February 4, 1999, Client l's father
died and Client 1 traveled to Swiss Bank No. 1 in Zurich and met
with DANIELA CASADEI, the defendant. At Client l's instruction,
CASADEI transferred Client l's inherited assets from the Account
to a new account held jointly by Client 1 and Client l's wife
(the "New Account"). The New Account was given a code number
separate and apart from the account number so as to ensure that
Client l's name appeared on as few documents as possible.
11. In or about April 2008, Client 1 traveled to Swiss
Bank No. 1 in Zurich and met with DANIELA CASADEI, the defendant,
and a director of Swiss Bank No. l's private banking department
(the "Director") to discuss news reports regarding the United
States Department of Justice's ("DOJ") investigation into the
cross-border banking business of UBS GA ("UBS"). At or about
that time, DOJ's investigation of UBS's cross-border banking
business became publicly known and received widespread media
coverage in Switzerland and the United States. In this meeting,
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CASADEI and the Director told Client 1 that Swiss Bank No. 1 no
longer had a presence in the United States, and was therefore
different from UBS and immune from the issues relating to UBS and
the U.S. government.
12. As of in or about 2007, Client l's undeclared
Swiss Bank No.1 account held approximately $839,678.
13. On Client l's Forms 1040 for at least the calendar
. years 2003 through and including 2008, Client 1 did not report
either Client l's interest in or signature or other authority
over Client l's account at Swiss Bank No.1. Moreover, for at
least the calendar years 2003 through and including 2008, Client
1 did not file an FBAR disclosing Client l's account at Swiss
Bank No.1.
Client 2
14. At all times relevant to this Indictment, Client 2
was a U.S. citizen and resident of the United States. Before the
mid-to-late 1990s, Client 2's father opened an undeclared account
at Swiss Bank No.1 (the "Father's Account"). In or about the
mid-to-late 1990s, Client 2 and Client 2's father traveled to
Swiss Bank No. 1 in Zurich and met with the client advisor
("Client Advisor I") for Client 2's father. Client Advisor 1
opened an account for Client 2 ("Client 2's First Account") so
that certain funds from the Father's Account could be transferred
into Client 2's First Account. Client 2 provided her U.S.
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passport to Client Advisor 1 during the meeting.
15. In or about 1999, Client 2's father died. Shortly
before Client 2's father died, additional funds in the Father's
Account were transferred into Client 2's First Account.
16. In or about 2001, Client 2 traveled to Swiss Bank
No. 1 in Zurich and met with her new client advisor, Client
Advisor 2 ("Client Advisor 2"). During this meeting, Client
Advisor 2 recommended that Client 2 open another account using a
"fantasy," or code, name so that Client 2 would have an
additional layer of privacy and protection from the U.S.
government and Client 2's husband, whom at the time Client 2 was
in the process of divorcing. During this meeting, Client Advisor
2 opened a new undisclosed account for Client 2 using the code
name "Hydrangea" ("the Hydrangea Account") .
17. In or about 2003, Client 2 traveled to Zurich and
met with Client Advisor 2. Client Advisor 2 helped Client 2
establish another undeclared account at another Swiss bank, Swiss
Bank No.2 ("the Swiss Bank No.2 Account"), and transfer the
funds from the Hydrangea Account into the Swiss Bank No. 2
Account. During that same trip, Client Advisor 2 renamed Client
2's First Account at Swiss Bank No.1 with the code name "Red
Rubin" (hereafter, "the Red Rubin Account"). Client Advisor 2
referred to "Red Rubin" as a "fantasy name."
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18. By in or about 2005, Client Advisor 2 had
become employed by UBS in Zurich. In or about 2005, Client 2 met
with Client Advisor 2 at a UBS office in Zurich to open a new
undeclared account ("the UBS Account") and transfer the funds in
the Swiss Bank No. 2 Account into the UBS account.
19. In or about 2007, Client 2 traveled to Swiss Bank
No.1 in Zurich and met with Client 2's new client advisor,
DANIELA CASADEI, the defendant. CASADEI referred to the name of
the Red Rubin Account as a "fantasy" name.
20. In or about the summer of 2008, Client 2 traveled
to Zurich and met with DANIELA CASADEI, the defendant, to discuss
transferring the funds in the UBS Account into the Red Rubin
Account. CASADEI approved the request and advised Client 2 to
open a new account using a new fantasy name and to close the Red
Rubin Account. CASADEI then set up a new undeclared account for
Client 2 at Swiss Bank No. 1 under the name "Conto Green-White
House" ("the Green White House Account") .
21. At the end of 2008, as global stock markets were
declining, Client 2 called DANIELA CASADEI, the defendant, from
the United States and asked for advice concerning her investment
portfolio within the Green White House Account. CASADEI advised
that Client 2 would have to travel to Zurich to discuss the
account. After the call, Client 2 traveled to Zurich and met
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with CASADEI. At that meeting, CASADEI advised Client 2 to "wait
it out," and not liquidate her investments because of the
downturn. Client 2 followed this investment advice.
22. In or around March 2009, Client 2 again called
DANIELA CASADEI, the defendant, from the United states with
concerns about the market. CASADEI told Client 2 that Client 2
could either "cash out the account," that is, to sell ~ll the
securities in the account for cash, or leave it alone. Client 2
instructed CASADEI to cash out the account, and CASADEI
thereafter did so.
23. As of in or about 2008, Client 2's Green White
House Account at Swiss Bank No.1 held approximately $850,285.
24. On Client 2~s Forms 1040 for at least the calendar
years 2003 through and including 2008, Client 2 did not report
either her interest in or signature or other authority over her
accounts at Swiss Bank No.1. Moreover, for at least the
calendar years 2003 through and including 2008, Client 2 did not
file an FBAR disclosing her accounts at Swiss Bank No.1.
Client 3
25. At all times relevant to the Indictment, Client 3
was a German citizen who was a lawful permanent resident of the
United States and, therefore, a U.S. taxpayer. In or about 1979,
Client 3 traveled to Swiss Bank No. 1 in Zurich and met with a
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client advisor to open an account. Client 3 indicated to the
client advisor that he resided in New Jersey in the United
States. The account was opened under a code name, "Conto
Xenopuslaevis." Whenever Client 3 traveled to Switzerland to
visit Swiss Bank No. 1 and inquire about his account, Client 3
signed in upon entering Swiss Bank No. 1 using this code name.
26. In or about September 2008, Client 3 learned about
the DOJ investigation of UBS. Client 3 traveled to Swiss Bank
No. 1 in Zurich and met with DANIELA CASADEI, the defendant, who
was now Client 3's client advisor. Client 3 asked CASADEI if
Swiss Bank No. 1 was susceptible to the same investigative
inquiries facing UBS, and CASADEI told Client 3 not to worry.
27. As of in or about 2008, Client 3's undeclared
Swiss Bank No.1 account held approximately $350,000.
28. On Client 3's Forms 1040 for at least the calendar
years 2003 through and including 2008, Client 3 did not report
either his interest in or signature or other authority over his
account at Swiss Bank NO.1. Moreover, for at least the calendar
years 2003 through and including 2008, Client 3 did not file an
FBAR disclosing his account at Swiss Bank NO.1.
Client 4
29. At all times relevant to the Indictment, Client 4
was a U.S. citizen who resided in South Carolina. In or about
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the late 1970s, Client 4 traveled to Swiss Bank No. l's then
existing office in Manhattan and met with a client advisor for
Swiss Bank No. 1 to open an undeclared account. In this meeting,
the client advisor explained that he would transfer the funds to
Swiss Bank No. l's office in Zurich, Switzerland where Client 4's
account would be maintained.
30. In or about November 2009, DANIELA CASADEI, the
defendant, who by that time was Client 4's client advisor, called
Client 4 in the United States. CASADEI mentioned on the call
that CASADEI had been trying to reach Client 4 for some time but
did not want to leave a message. CASADEI told Client 4 that he
had to travel to Swiss Bank No., 1 in Zurich to close the account
because the United States was applying too much pressure on Swiss
banks for maintaining undeclared accounts for U.S. taxpayers.
However, CASADEI also stated that Client 4 could continue to
maintain an account at Swiss Bank No. 1 by retaining a third
party financial advisor to manage an account for Client 4 at
Swiss Bank No.1. CASADEI explained that these third party
financial advisors were former employees of Swiss Bank No. 1 who
had left Swiss Bank No. 1 to set up their own investment firms,
and Client 4 would be charged a fee for this service. During a
telephone call to Client 4 in the United States, CASADEI provided
Client 4 with a list of names of independent financial advisors.
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31. As of in or about 2009, Client 4's undeclared
Swiss Bank No.1 account held approximately $518,241.
32. On Client 4's Forms 1040 for at least the calendar
years 2003 through and including 2008, Client 4 did not report
either his interest in or signature or other authority over his
account at Swiss Bank No.1. Moreover, for at least the calendar
years 2003 through and including 2008, Client 4 did not file an
FBAR disclosing Client 4's account at Swiss Bank No.1.
Client 5
33. At all times relevant to the Indictment, Client 5
was a U.S. citizen who resided in the United States. In or
about 1992, Client 5 traveled to Swiss Bank No. 1 in Zurich and
met with DANIELA CASADEI, the defendant. In this meeting, Client
5 told CASADEI that he wanted to open an account at Swiss Bank
No. 1 and that he would transfer funds from an account he owned
at a bank in London. Client 5 told CASADEI that he resided in
the United States.
34. Between in or about 1992 and 2009, on several
occasions Client 5 communicated from the United States with
DANIELA CASADEI, the defendant, both over the telephone and
through written communication mailed by CASADEI from a post
office box in Zurich to Client 5 in the United States.
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35. As of in or about 2008, Client 5's undeclared
Swiss Bank No.1 account held approximately $2,571,966.
36. On Client 5's Forms 1040 for at least the calendar
years 2003 through and including 2008, Client 5 did not report
either his interest in or signature or other authority over his
account at Swiss Bank No.1. Moreover, for at least the calendar
years 2003 through and including 2008, Client 5 did not file an
FBAR disclosing his account at Swiss Bank NO.1.
Client 6
37. At all times relevant to the Indictment, Client 6
was a U.S. citizen who resided in the United States. In or about
2000 or 2001, Client 6's husband inherited an account at Swiss
Bank No.1. In or about 2001 or 2002, Client 6 and her husband
traveled to Swiss Bank No. 1 in Zurich and met with DANIELA
CASADEI, the defendant, who was the client advisor for Client 6's
husband. The purpose of the meeting was to make Client 6 a joint
owner of the account. The account was undeclared.
38. In or about March 2003, Client 6's husband died
and Client 6 moved to a new residence. Client 6 contacted
DANIELA CASADEI, the defendant, from the United States by phone
and provided Client 6's new address in Raleigh, North Carolina.
39. In or about October 2003, Client 6 called DANIELA
CASADEI, the defendant, from Client 6's residence in the United
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States to schedule an appointment at Swiss Bank No. 1 in Zurich.
CASADEI accepted the call and scheduled the appointment. Client
6 then traveled to Zurich and converted the undeclared account
from a jointly held account to an account held in Client 6's name
alone.
40. As of in or about 2008, Client 6's undeclared
Swiss Bank No.1 account held approximately $1,801,984.
41. On Client 6's Forms 1040 for at least the calendar
years 2003 through and including 2008, Client 6 did not report
either her interest in or signature or other authority over her
account at Swiss Bank NO.1. Moreover, for at least the calendar
years 2003 through and including 2008, Client 6 did not file an
FBAR disclosing her account at Swiss Bank No.1.
42. Clients 1 through 6 of DANIELA CASADEI, the
defendant, are described in the following table:
Beneficial Code Name (s) or Approximate Date Approximate High Owner(s) Nominee Name(s) Swiss Bank No. 1 Value of Swiss
in which Swiss Account(s) Opened Bank No. 1 Bank No. 1 Accounts Account(s) Held