More Complications in the UBS Case

SFL here, still filling in while David does his "trial lawyer" thing.

More on UBS --

Now Judge Gold has a Swiss federal court to possibly contend with:

UBS was sued on Tuesday in a Swiss federal court by wealthy American clients seeking to prevent the disclosure of their identities as part of a tax-evasion investigation by the United States Justice Department.

The lawsuit accuses UBS and Switzerland’s financial regulator, the Swiss Financial Market Supervisory Authority, or Finma, of violating Swiss bank secrecy laws and of conducting what Swiss law considers illegal activities with foreign authorities. It also named Peter Kurer, the chairman of UBS, and Eugen Haltiner, the chairman of Finma, as defendants.

The suit, filed by a lawyer in Zurich, Andreas Rued, on behalf of nearly a dozen American clients, underscores the growing clash between Swiss banking secrecy laws and those of the United States. Tax evasion is not considered a crime in Switzerland. Disclosing client names under Swiss law is a criminal offense and can expose bank executives and officers to fines, prison terms and other penalties.

Oh no -- foreign law possibly impacting our legal process again? Remember that whole Supreme Court controversy a few years back?

Me neither, but Judge Scalia probably does.

Judge Daniel T. K. Hurley...

...is taking senior status.

We are losing a gem of a judge. I recently tried a case with Judge Hurley and he loves being a judge and trying cases. That's evident from being in trial for a month with him. He is courteous to the lawyers and treats both sides with complete respect -- and he is a thoughtful judge. He calls em right down the middle.

We all wish him well.

So, any bets on who President Obama will appoint for that spot?

Ho Hum -- The Princess, A Sex Sting, and UBS

Hey, can you tell it's SFL here?

Yep, still foolin' around while David tries another big case.

So I told you all this UBS thing was big. Here's an update on what went down in Judge Gold's courtroom yesterday:

U.S. District Judge Alan S. Gold set a July 13 hearing on the IRS lawsuit, unless an agreement is reached first. UBS claims that turning over the account names would violate Swiss privacy law and jeopardize the bank's license to stay in business.

"Such violations would expose these (UBS) employees to substantial prison terms, as well as fines, penalties and other sanctions," the UBS lawyers said in a court filing last week. "There is simply no reason to have, nor equity in having, such an expedited process here."

The IRS had sought an accelerated timetable, but Justice Department tax attorney Stuart Gibson and UBS lawyers told Gold at a brief telephone hearing Monday they had agreed on a lengthier process. Gold also set a series of deadlines for court filings.

"I would appreciate the continued efforts to discuss this matter, to narrow down what the legal issues are and the factual issues are," Gold said.

Most judges probably would appreciate that.

What do you know -- the feds bust a Miami Beach sex ring:

Bernabe-Caballero, 34, remained without bond in Miami's Federal Detention Center Monday night and was scheduled for a 10 a.m. hearing Tuesday about extradition to Michigan, where the grand jury in the case had convened.

Bernabe-Caballero's attorney, Rene A. Sotorrio, declined to comment.

Smart move, I wouldn't say anything either if my client was facing these kind of allegations.

And -- can you believe it -- a story about a cocaine princess and federal court.

Sometimes these things write themselves.

More on Kuehne R&R

SFL here, hope you had a nice weekend.

Here's a nice quote from John Pacenti's article on Judge Bandstra's R&R on Ben Kuehne:

If Bandstra’s decision stands, the case would be down to five substantive money laundering counts. Kuehne and Saldarriaga are accused of using a money broker to hide the movement of drug profits into the defense fund. The money broker was an informant working with the government and exchanging pesos for dollars used in U.S. drug stings.

Miami litigator Jane Moscowitz, one of Kuehne’s attorneys, said she was thrilled with the Bandstra ruling.

“It took my breath away that the motion had been granted,” she said.

And us too, Jane.

And here's some more background on the IRS/UBS suit, which is being closely watched in financial and legal circles:

While the deferred prosecution agreement reached between Swiss banking giant UBS and federal prosecutors on Wednesday might have initially looked like a great deal for the government, in reality the Zurich-based bank isn't disclosing nearly as many client names as law enforcement officials are suggesting, says Miller & Chevalier tax partner George Clarke III.

Clarke says that the decision by the Justice Department to file suit against UBS on Thursday in Miami is evidence of this.

Despite forking over $780 million in penalties as part of its deferred prosecution agreement, UBS, represented by Wachtell, Lipton, Rosen & Katz litigation partner John Savarese, managed to secure a pretty good deal for itself, Clarke says.

Sure, not bad for a bunch of carpetbaggers from New York. But what are we, chopped liver?

Another one bites the dust

The government's case against Ben Kuehne is in utter shambles -- Count I (the most serious count) was already dismissed. The case against a co-defendant has been dismissed. And now, Magistrate Judge Bandstra has recommended that Count 7 -- the wire fraud count -- be dismissed against all defendants. It is time for the government to concede defeat, no?