CONCORD – A Hollis man has been charged with hiding assets in a foreign bank account, as a result of last year’s decision by Switzerland’s biggest bank to turn over client information to the U.S. Internal Revenue Service.

A Swiss court recently ruled that Swiss banking regulators violated that country’s laws when they ordered UBS AG to cooperate with the IRS and release client records in order to avoid prosecution in the United States, The New York Times reported last week.

As a direct result of information gleaned from UBS, IRS investigators and federal prosecutors on Tuesday charged Lothar Hoess, of Hollis, with violating federal tax law by failing to report a foreign bank account, court records show.

The charge carries a maximum of up to five years in prison, and a fine of up to $250,000, under federal law. Hoess is believed to be the first New Hampshire resident prosecuted as a result of the UBS bank agreement; The Telegraph could find no other such cases.

Hoess appeared in U.S. District Court on Tuesday after his arrest, and was released pending further hearings after surrendering his Austrian passport and a pistol, and posting a $1,000,000 personal recognizance bond, court records show.

Hoess’ lawyer, Peter Anderson, of Manchester, could not be reached for comment Wednesday afternoon.

One of the prosecutors, Assistant U.S. Attorney Arnold Huftalen, declined to comment on the case Wednesday.

According to an affidavit filed by IRS Special Agent Jeremiah Devlin, Hoess is the managing director of Paper Graphics International Inc., in Amherst. An Austrian national, Hoess has been a legal permanent resident of the United States since 1969, Devlin wrote.

As part of its agreement with the IRS last year, Devlin wrote, “UBS AG, Switzerland’s largest bank, admitted that it conspired with certain United States taxpayers to defraud the United States and its agency, the IRS.”

Prosecutors charge that UBS helped clients to set up accounts using names of business entities outside the United States to thwart the IRS, Devlin wrote.

Prosecutors charge Hoess and his wife were the beneficiaries of UBS accounts in the name of Terry Property, SA, a corporation created in Belize in 2000, and IOSE Ltd. of Ireland, incorporated in 2004.

In 2005, Devlin wrote, Hoess had bank accounts in both company names at Bank Ehinger & Armand von Ernst AG in Zurich, Switzerland, and in December 2005, he transferred ?475,000 (approximately $562,376) from those accounts to a newly created Terry Property account at UBS.

Hoess made additional transfers over the following year, “in amounts in excess of $10,000” from one Swiss bank to the other, and transferred funds from the Terry Property account to various other businesses around the world, to buy various things, including luxury sports cars.

“Based upon a review of documents obtained during the course of the investigation, there is probable cause to believe that Terry Property, was a nominee entity created by Lothar Hoess and others that was utilized to conceal his beneficial ownership in his UBS Swiss bank account,” Devlin wrote.

Prosecutors charge that Hoess and his wife knew they were required to file U.S. tax returns on the accounts, but didn’t do so from 2005 through 2008.

Andrew Wolfe can be reached at 594-6410 or awolfe@nashuatelegraph.com.

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