Peter Canale Avoids Prison in Swiss Bank Tax Evasion Case

(Bloomberg) — A retired optician who illegally avoided taxes on hundreds of thousands of dollars using multiple Swiss bank accounts was spared prison time, after his brother went to jail for hiding money in the same accounts.

Peter Canale said in August that he concealed assets of more than $780,000 for over a decade, failing to file a report of Foreign Bank and Financial Accounts with U.S. tax authorities. He was sentenced Thursday in Manhattan federal court to three years’ community service; the judge said he was a victim of his father’s illegal will. His brother Michael Canale, a retired U.S. Army surgeon, was sentenced in 2013 to six months in prison for using the accounts to conceal hundreds of thousands of dollars.

After their father died in 2000, prosecutors said, the brothers inherited a Swiss bank account that by December 2010 held assets valued at about $1.4 million. They met in New York with Beda Singenberger, a financial adviser the U.S. says specialized in American clients, and Hans Thomann, then a client adviser at UBS Group AG, and agreed their assets would be maintained in undeclared bank accounts in Switzerland for them, according to the U.S. Peter Canale opened an undeclared account with assets of about $788,000 at Wegelin & Co., a Swiss private bank, under the name of a sham foundation, prosecutors said.

Since 2008, the IRS and the U.S. Justice Department have been probing overseas banks that set up undeclared bank accounts for wealthy U.S. citizens. More than 50,000 Americans have avoided prosecution by disclosing secret accounts, paying over $7 billion. Separately, offshore banks including UBS and Credit Suisse Group AG have agreed to pay more than $4 billion in U.S. fines, penalties and restitution.