JULIUS BÄR GRUPPE AG ZURICH (Reuters) - Many of Switzerland's private bankers breathed a sigh of relief at the acquittal of Raoul Weil, the former head of wealth management at UBS (>> UBS AG), on charges of helping wealthy Americans dodge taxes.
Weil's arrest last year on a weekend sojourn to Bologna and his subsequent extradition to the United States on criminal charges stunned financiers in Zurich and Geneva. It made them think twice about crossing the Swiss border for fear of being caught in the U.S. Justice Department's net.
"That Weil was acquitted reassures me a bit. I had concerns about what could happen if Weil had been found guilty," one portfolio manager, whose clients mostly come from outside of Switzerland, said.
"To be sure the verdict is not an all-clear. But it makes me a bit more confident that, if big fish like Weil are let free, small fish like me aren't on the radar of the authorities."
Weil's acquittal was a major setback for the U.S. Justice Department.
It took six years to bring the former UBS banker to trial and the jury in a Florida court took just over an hour to acquit him after deciding government lawyers had failed to show that he was involved in a single conspiracy to help as many as 17,000 U.S. taxpayers hide $20 billion.
The 54-year old was the highest-ranking Swiss executive to stand trial in a U.S.-led campaign to stop its citizens using Swiss banks to hide their assets. He had pleaded not guilty in the case.
Martin Naville, chief executive of the Swiss-American Chamber of Commerce in Zurich, said the outcome of Weil's case might leave U.S. authorities more reluctant to pursue others.
"The kind of effort that (the DOJ) had to put into this case and they lost will make them think twice before they stop and indict somebody else," he said.
Nicole Navas, a spokeswoman for the U.S. Justice Department, said it was disappointed by Monday's verdict, as well as the acquittal on Friday of Shokrollah Baravarian, a former executive at Israel's Mizrahi Tefahot Bank also accused of conspiring to help U.S. clients defraud the IRS through the opening of secret foreign bank accounts.
"However, this decision will not impact the department's ongoing commitment to holding offshore tax evaders and those who aid them accountable," Navas said.
At least 25 people, including bankers, lawyers and asset managers, have been charged by U.S. authorities with assisting tax evasion via Swiss banks since 2008. Of that 25, six have pleaded guilty.
Further prosecutions are possible and despite Weil's acquittal, bankers in Switzerland said they would keep looking over their shoulder.
"There is a sense of relief but this is just a single case and it wouldn't be wise to read too much into it," a Zurich-based private banker said.
Weil's former employer UBS paid $780 million in 2009 after admitting to helping U.S. taxpayers hide money. Earlier this year, the U.S. secured a $2.6 billion in penalties and a guilty plea from Credit Suisse related to tax evasion.
Current and former employees of UBS and Credit Suisse could still be at risk of prosecution and dozens of Swiss banks remain the subject of U.S. investigations including the country's third largest listed bank Julius Baer (>> Julius Baer Gruppe AG).
(Additional reporting by Albert Schmieder in Zurich and Nate Raymond in New York. Writing by Carmel Crimmins. Editing by Jane Merriman)
By Joshua Franklin and Rupert Pretterklieber
