Swiss Executive Pleads Guilty To Tax Fraud Conspiracy

 

  Damian Williams, the United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, and James C. Lee, Chief of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced that DANIEL WÄLCHLI pled guilty today to conspiring to defraud the United States in connection with a scheme to help wealthy American clients conceal more than $60 million in income and assets held in undeclared offshore bank accounts and evade U.S. income taxes.  WÄLCHLI was a member of the executive board of a Swiss holding company that owned, among other entities, a Zurich-based private bank called Privatbank IHAG Zurich AG (“IHAG”).  WÄLCHLI pled guilty earlier today before U.S. District Judge Gregory H. Woods. 

According to the allegations in the Indictment, court filings, and statements made in Court:

From in or about 2009 to in or about 2014, WÄLCHLI and his co-conspirators defrauded the IRS by concealing income and assets of three wealthy U.S. clients with undeclared bank accounts at IHAG.  In order to assist the U.S. clients, WÄLCHLI and his co-conspirators devised and implemented a scheme dubbed the “Singapore Solution” to fraudulently conceal the bank accounts of the U.S. clients, their assets, and their income from U.S. authorities.  In furtherance of the fraudulent scheme, WÄLCHLI and his co-conspirators agreed to transfer more than $60 million from undeclared IHAG bank accounts of the U.S. clients through a series of nominee bank accounts in Hong Kong and other locations before returning the funds to newly opened accounts at IHAG in the name of a Singapore-based asset-management firm that WÄLCHLI helped establish.  The U.S. clients paid large fees to IHAG and others to help them conceal their assets and evade U.S. income taxes. 

WÄLCHLI, 55, of Switzerland, pled guilty to one count of conspiracy to defraud the United States, which carries a maximum sentence of five years in prison. 

The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as WÄLCHLI’s sentence will be determined by the judge.

Mr. Williams praised the outstanding work of IRS-CI.  Mr. Williams thanked the Department of Justice’s Tax Division for their partnership on this case. 

Statement from NYGOP Chair Ed Cox

 

New York State Republican Chair Ed Cox released the following statement following news of the indictment of former President Trump:

 

“I reiterate what I said two weeks ago when this news first leaked: this is miscarriage of justice, an outrageous violation of democratic norms and a travesty for our politics at home and reputation abroad.  

"Both the Southern District of New York and Joe Biden's Department of Justice declined to pursue this matter. This is a blatant political scheme by Alvin Bragg to make a name for himself and play to his liberal Manhattan base by smearing, tearing down and demeaning former President Trump. 

 

“Alvin Bragg has already abdicated his basic responsibilities by releasing criminals back onto the streets to wreak havoc on New York’s citizens and minority communities in particular. He has brought further disgrace to his office with this political game. 

“The great Manhattan District Attorney Robert Morgenthau is turning over in his grave.”

NYC PUBLIC ADVOCATE'S STATEMENT ON THE INDICTMENT OF DONALD TRUMP

 

"This is not a day of triumph, except for the rule of law which governs all of us, including disgraced former presidents. I commend Manhattan District Attorney Bragg for courageously leading a thorough investigation to this point.

"Donald Trump must be held accountable. Not only for the financial charges he’s been indicted on today, but for his efforts to undermine our democracy, which are still under investigation and which still reverberate dangerously throughout our country. We will now undoubtedly see conservative hypocrisy, lies, and dangerous rhetoric as some put not only party, but person, over the well-being of our country and the people within it.

"Today’s indictment is part of a process that will continue to move forward, uninhibited by the former president’s attacks or incitements to action, and unwavering in a commitment to justice for the unprecedented conduct of Donald Trump in his efforts to grab and hold onto power and relevance at the expense of any and all."

DiNAPOLI: WALL STREET 2022 BONUSES FELL 26% FROM PREVIOUS YEAR, RETURN TO PRE-PANDEMIC LEVELS

 

$176,700 Average Bonus in NYC Securities Industry

Wall Street’s 2022 average bonus paid to securities employees dropped to $176,700, a 26% decline from the previous year’s $240,400, according to New York State Comptroller Thomas P. DiNapoli’s annual estimate. Rising interest rates and fear of a recession led to significantly less profits on Wall Street after a record year in 2021. As a result, bonuses returned to pre-pandemic levels, which will mean a decline in related income tax revenue, as anticipated by New York state and the city.

“Wall Street’s cash bonuses were expected to fall as several factors weighed on the securities’ industry profitability in 2022,” DiNapoli said. “A 26% decline brings the average bonus closer to what financial employees received prior to the pandemic. While lower bonuses affect income tax revenues for the state and city, our economic recovery does not depend solely on Wall Street. Employment in leisure and hospitality, retail, restaurants and construction must continue to improve for the city and state to fully recover.”

The $33.7 billion bonus pool for 2022 was 21% lower than the previous year’s record of $42.7 billion — the largest drop since the Great Recession. The fall to pre-pandemic levels mostly reverses the pool’s dramatic growth of 25% in 2020 and 15% in 2021. In 2022, Wall Street’s pretax profits fell 56% from the previous year due to deep declines in investment-banking fees, which were driven by the Federal Reserve’s interest-rate hikes, inflation and Russia’s invasion of Ukraine.

Wall Street bonuses have a significant impact on tax revenue in the state and city budgets. DiNapoli estimates that the securities industry accounted for approximately $22.9 billion in state tax revenue, or 22% of the state’s tax collections, for State Fiscal Year (SFY) 2021-22, and $5.4 billion in city tax revenue, 8% of total tax collections for City Fiscal Year (CFY) 2022.

In 2021, bonuses drove income tax gains of $282 million for the state and $128 million for the city compared to the prior year. DiNapoli projects the 2022 bonuses in New York City’s securities industry will generate $457 million less in state income tax revenue and $208 million less for the city when compared to the previous year. However, the state and city anticipated these significant declines, minimizing a fiscal shock to their budgets in the short-term. The Governor’s proposed budget assumed bonuses in the broader finance and insurance sector would decrease by 25.2% in SFY 2022-23, while the CFY 2023 financial plan assumed a decrease of 35.6% for the securities industry.

The securities industry also has a significant impact on the city’s employment and overall economy. In 2022, the sector employed about 190,800 people, the highest level in more than two decades. DiNapoli estimates that 1 in 11 jobs in the city is either directly or indirectly associated with the securities industry. While the city remains the capital of the U.S. securities industry, its share of jobs has been declining over time as large firms have left the city. Sector employment in 2022 was 5.1% lower than in 2000, which represented the peak for securities employment in the city. 

More securities employees are back in the office, which contributes to increased spending in the city and subway ridership. Financial services firms reported 59% of employees were in the office on a given day in January 2023, compared to 52% for all firms in the city, according to the Partnership for New York City’s survey. Additionally, 43% of securities employees ride the subway, a higher rate than the citywide average for workers. DiNapoli estimates Wall Street was responsible for 16% of all economic activity in the city in 2021, and thus the financial sector’s ability to generate revenue and turn profit is critically important to New York.

Methodology

DiNapoli’s office releases an annual estimate of bonuses paid during the traditional December through March bonus season to securities industry employees who work in New York City. Bonuses paid by firms to their employees located outside of New York City, whether in domestic or international locations, are not included. The Comptroller’s 2022 estimate is based on personal income tax withholding trends and includes cash bonuses paid for work performed in 2022 and bonuses deferred from prior years that have been cashed in. The estimate does not include stock options or other forms of deferred compensation for which taxes have not been withheld.

Charts

Bonus Pool Chart from 1993 to 2022

Annual Profits and Employment Chart

 

Related Work

Report The Securities Industry in New York City, October 2022

Dashboard Securities Sector Industry Dashboard

Southern District Of New York Court Employee And Practicing Attorney Charged With Bribery And Making False Statements

 

Courthouse Employee Referred Clients to Criminal Defense Lawyer in Exchange for Illegal Compensation, and Both Defendants Lied to Federal Agents

 Damian Williams, the United States Attorney for the Southern District of New York, announced today the unsealing of charges against DIONISIO FIGUEROA, a/k/a “Dionicio,” an employee of the United States District Court for the Southern District of New York (“the SDNY District Court”), and TELESFORO DEL VALLE, JR., a/k/a “Ted,” a criminal defense attorney practicing in the SDNY District Court and elsewhere, for their participation in a scheme in which FIGUEROA referred criminal defendants to DEL VALLE and encouraged those defendants to retain DEL VALLE as counsel in exchange for cash payments from DEL VALLE to FIGUEROA.  FIGUEROA was arrested, and DEL VALLE surrendered earlier today, and both will be presented before United States Magistrate Judge Andrew E. Krause in the SDNY District courthouse in White Plains, New York.

U.S. Attorney Damian Williams said: “The public, the Court, and the bar all rely on the integrity and honesty of the professionals who work for the Court and the lawyers who appear there.  For years, Figueroa and Del Valle allegedly violated their duties and undermined the fair administration of justice, all for their personal gain.  This Office will do its part to uphold the high standards of conduct expected of all those who play a role in the criminal justice process.”

According to the allegations in the Indictment:[1]

As a clerk in the SDNY Magistrate Clerk’s Office since in or about 2002, FIGUEROA was responsible for performing duties that included, among other things, making data entries regarding official case events in criminal cases; making summary entries of documents and proceedings on case dockets; and performing inquiries and furnishing information, either in person or by correspondence, regarding the status of cases.  FIGUEROA also played a role with respect to the intake of criminal cases, including by preparing appearance bonds, advising defendants and their family members about the conditions of the bonds, and ensuring that appearance bonds were signed by all parties prior to a defendant’s release. 

SDNY District Court personnel policies prohibited FIGUEROA from having outside employment that would pose a conflict of interest; receiving payments, gifts, or other benefits from persons having business before the SDNY District Court; and recommending particular attorneys to members of the public.  FIGUEROA also was subject to the United States Courts’ Code of Conduct for Judicial Employees (the “Code of Conduct”), which cautioned judicial employees that “[a] number of criminal statutes of general applicability govern federal employees’ performance of official duties.  These include: 18 U.S.C. § 201 (bribery of public officials and witnesses) ….”  The Code of Conduct likewise admonished, among other things, that “[a] judicial employee should never influence or attempt to influence the assignment of cases, or perform any discretionary or ministerial function of the court in a manner that improperly favors any litigant or attorney, nor should a judicial employee imply that he or she is in a position to do so.” 

DEL VALLE is a private attorney who has appeared in numerous federal criminal cases pending before the SDNY District Court.

Between at least 2011 and 2022, FIGUEROA and DEL VALLE engaged in a scheme whereby FIGUEROA used his position as an employee of the SDNY District Court to encourage criminal defendants to retain DEL VALLE to represent them in pending criminal cases.  In return, DEL VALLE paid FIGUEROA a portion of the fees clients paid to DEL VALLE.  Over the course of more than a decade, FIGUEROA referred at least 45 SDNY criminal defendants to DEL VALLE, and DEL VALLE paid FIGUEROA tens of thousands of dollars in referral fees.  DEL VALLE paid FIGUEROA directly and through an intermediary, who would pick up envelopes of cash for FIGUEROA from DEL VALLE’s law office. 

Many of the clients who ended up retaining and paying DEL VALLE were assigned free, court-appointed counsel.  Nevertheless, FIGUEROA encouraged those individuals to change counsel, including by vouching for DEL VALLE’s abilities as a lawyer.  For example, in July 2018, FIGUEROA told family members of one defendant (“Defendant-1”), in substance, that FIGUEROA knew a good attorney who was a specialist in similar cases and could get Defendant-1 out of trouble.  He then provided FIGUEROA’s contact information to Defendant-1’s relative.  Similarly, in February 2020, FIGUEROA told a family member of another defendant (“Defendant-2”), in substance, that if anyone could help Defendant-2 in Defendant-2’s case, it was DEL VALLE.  At the time, Defendant-2 was represented by court-appointed counsel.

FIGUEROA and DEL VALLE are also charged with making false statements to law enforcement during the investigation.  In November 2022, federal law enforcement agents separately interviewed both FIGUEROA and DEL VALLE.  After advising each that lying to federal law enforcement agents is a federal crime, FIGUEROA and DEL VALLE each made materially false, fictitious, and fraudulent statements and representations in response to the agents’ questions.  In particular, FIGUEROA denied making any referrals to DEL VALLE, except on a small number of occasions concerning close relations or friends, and further denied ever having received payments from DEL VALLE for referrals.  As to DEL VALLE, upon being served with a federal grand jury subpoena requiring the production of records from his law firm, DEL VALLE denied having any records reflecting client referrals from, or payments to, FIGUEROA or anyone else.

FIGUEROA, 66, of New York, New York, and DEL VALLE, 65, of Leonia, New Jersey, are each charged with one count of conspiracy to bribe a federal employee and pay illegal compensation to a judicial employee, which carries a maximum potential sentence of five years in prison; one count of bribery of a federal employee, which carries a maximum potential sentence of 15 years in prison; one count of illegal compensation to a judicial employee, which carries a maximum potential sentence of five years in prison; and one count of false statements, which carries a maximum potential sentence of five years in prison.

The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.

Mr. Williams praised the outstanding investigative work of the Special Agents from the U.S. Attorney’s Office for the Southern District of New York.

The charges contained in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the descriptions of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.

MAYOR ADAMS, OLR COMMISSIONER CAMPION ANNOUNCE SIGNING OF MEDICARE ADVANTAGE CONTRACT

 

Contract with Aetna Ensures Lower Deductible, Cap on Out-of-Pocket Maximums, and New Benefits for City’s Retirees 

Plan Also Significantly Lowers Numbers of Procedures Requiring Prior Authorization

New York City Mayor Eric Adams and New York City Office of Labor Relations (OLR) Commissioner Renee Campion today announced the official signing of the contract between the City of New York and Aetna to provide a Medicare Advantage plan to the city’s roughly 250,000 retirees and their dependents. The New York City Aetna Medicare Advantage plan will continue the city’s long-standing commitment to providing high-quality, premium-free coverage to the city’s retirees and their dependents.

 

“Our administration has never wavered in our commitment to provide retirees and their dependents with high-quality, sustainable coverage while allowing us to rein in the skyrocketing costs of health care and the strain it is placing on our city’s budget,” said Mayor Adams. “This plan improves upon retirees’ current plans, including offering a lower deductible, a cap on out-of-pocket expenses, and new benefits, like transportation, fitness programs, and wellness incentives. We also heard the concerns of retirees and worked to significantly limit the number of procedures subject to prior authorization under this plan. This Medicare Advantage plan is in the best interests of both our city’s retirees and its taxpayers.”

 

“For months, the city has worked with the Municipal Labor Committee to diligently negotiate this contract with Aetna to provide a custom Medicare Advantage program to the city’s retirees,” said OLR Commissioner Campion. “This new plan provides substantial improvements to retirees’ health coverage, as well as new and enhanced benefits. We thank the MLC for their partnership throughout this process and Aetna for working with us to provide the best possible plan for New York City retirees.”

 

“We’re honored to offer a customized Medicare Advantage plan that provides high-quality, affordable, and convenient health care for City of New York retirees who’ve devoted their careers to serving New Yorkers,” said Dan Finke, president, Aetna. “With nearly 60 years of Medicare expertise and experience, we stand ready to serve retirees through our network of primary care and specialty physicians, mental health providers, and hospitals they already know and trust.”

 

The signing of the five-plus year contract follows the official approval by the Municipal Labor Committee (MLC) on March 9, 2023. As of September 1, 2023, retirees currently enrolled in the city’s Senior Care plan will automatically be enrolled in the Medicare Advantage plan. Medicare-eligible retirees and their dependents will also be able to opt out of the Aetna Medicare Advantage plan and enrolling in the city’s HIP VIP Plan instead.

 

The city’s Aetna Medicare Advantage plan will provide a lower deductible for retirees than their current Senior Care plan. The plan also places a cap on out-of-pocket expenses and offers new benefits to retirees, including transportation to certain doctors’ appointments, fitness programs, and wellness incentives. Additionally, the plan significantly limits the number of procedures requiring prior authorization.

 

“We’ll continue to build a strong partnership with the City of New York and the Municipal Labor Committee, which were and will remain instrumental in helping engage retirees in their health care,” said Rick Frommeyer, senior vice president, Aetna Group Retiree Solutions. “We’ve already proactively collaborated on multiple ways to educate retirees about our Medicare Advantage plan benefits and to help ensure a smooth transition on September 1, 2023. We look forward to meeting retirees at one of the many upcoming open enrollment meetings.”

 

The city is committed to working with Aetna to ease the transition to the new plan and answer any questions from eligible retirees. Aetna has built a custom website specifically for City of New York retirees. The website has resources for retirees to look up their doctor, find out detailed information about their plan, and register for online and in-person information sessions. Retirees can also contact Aetna’s dedicated call center at 855-648-0389 (TTY: 711), Monday to Friday, from 8:00 AM to 9:00 PM. Aetna will additionally be holding a series of in-person town hall meetings beginning next week in the New York metro area and other states with high Medicare-eligible retiree populations to answer any questions and assist them with the transition.

 

Comptroller Brad Lander Sets Prevailing Wage Rates for Staten Island Ferry Engineers

 

New York City Comptroller Brad Lander released a final determination of the prevailing wage rate and benefits for Staten Island Ferry marine engineers.

The order set hourly rates and benefits back to November 2010 when the last collective bargaining agreement expired. For marine engineers, the Comptroller determined that hourly rate in 2010 should have been $40.90, rising to $50.45 as of 2022. For chief marine engineers, the Comptroller set the rate at $64.61 in 2010, rising to $79.71 as of 2022. The Comptroller set vacation and other benefits at the level of other New York City employees.

“Staten Island Ferry engineers, who have been without a contract for over a decade, deserve a fair wage for safely steering thousands of New Yorkers across our harbor every day,” said New York City Comptroller Brad Lander. “Today’s ruling reflects diligent review of the work, pay, and benefits for comparable workers to set a fair prevailing wage as required by state law.”

Under New York State law, the New York City Comptroller sets and enforces prevailing wage law for public works projects and building service work on New York City government-funded work sites. Section 220 of New York State Labor Law sets out how prevailing wages shall be determined.

After review of the judge’s report, the Comptroller issued an interim decision, asking the Bureau of Labor Law, the New York City Office of Labor Relations, and MEBA to submit additional documentation in October 2022, and at the parties’ request again in February 2023. The Comptroller’s final order is available here and wage sheets are available here.

Governor Hochul Announces New "I LOVE NY" Tourism Partnership with New York Yankees and New York Mets on Opening Day

 

New Campaign Will Highlight New York's Baseball Legacy and Will Encourage Fans to Plan a Baseball-Themed Getaway

Attractions and Events Highlighted at iloveny.com/baseball

 Governor Kathy Hochul today announced a new travel and tourism partnership between I LOVE NY, the New York Yankees and the New York Mets, celebrating the start of the 2023 Major League Baseball season. I LOVE NY branded signage will appear in Yankee Stadium and Citi Field this season, and will also be visible during game broadcasts on television. This signage, coupled with digital and social media efforts, will encourage fans to visit iloveny.com/baseball and plan a New York State baseball-themed trip. New York is an ideal destination for baseball fans, and the campaign will showcase all there is to see and do for fans of all ages.

"Nothing says springtime in New York like Opening Day, and we are thrilled to welcome visitors, fans, and spectators from around the world to be a part of our state's baseball legacy," Governor Hochul said. "As the Bronx Bombers and the Amazin' Mets take the field this season, we are proud to work hand in glove with New York's major league teams and help fans take in our state's baseball history, heritage and culture. Thanks to this dynamic I LOVE NY partnership, we will ensure that tourism in New York continues to be a home run."

Baseball has a rich history in New York: it is the official state sport, and home to the National Baseball Hall of Fame and Museum in Cooperstown. The Hall of Fame's annual Induction Weekend festivities welcome tens of thousands of fans each summer. New York is where Jackie Robinson broke baseball's color barrier in April 1947, and the new Jackie Robinson Museum in Lower Manhattan pays tribute to his achievements on and off the diamond.

Baseball is also an economic engine for communities throughout the state. Millions of fans from around the world travel to Queens and the Bronx each season to cheer on the Mets and Yankees. New York has six Minor League Baseball teams from Buffalo to Brooklyn, and eight independent league clubs. Countless youth baseball and softball leagues, teams and tournaments bring families from across New York and the Northeast during the summer baseball season, planting the seeds for the next generation of major leaguers.