Woodlands man pleads guilty to filing false tax return

April 13, 2010 4:05:33 PM PDT
A resident of The Woodlands pleaded guilty to filing a false tax return in Florida, the Justice Department and IRS announced Tuesday. According to court documents and statements made in court, Paul Zabczuk admitted to filing a false tax return for 2004 wherein he failed to report that he had an interest in or a signature authority over financial accounts at UBS AG, one of Switzerland's largest banks.

Zabczuk provided consulting services relating to the purchase and sale of chemicals by companies involved in drilling for oil. He directed his foreign clients to make payments to his company in offshore bank accounts he controlled in the Bahamas and in Switzerland. Zabczuk would repatriate funds to the United States by making cash withdrawals at UBS branches in Nassau, Bahamas; London; and Zurich, Switzerland.

The defendant would also wire transfer funds from UBS AG to an agent in the People's Republic of China, who would then purchase furniture and other antiques on his behalf, which were then sent to the United States for the defendant's personal use and for resale.

As part of UBS' deferred prosecution agreement under which the bank admitted to helping U.S. taxpayers hide accounts from the IRS, the company provided the United States government with the identities of, and account information for, certain U.S. customers of UBS's cross-border business, including Zabczuk. He is the eighth former client of UBS to plead guilty to a tax felony.

Zabczuk remains free on $1 million bail pending sentencing, where he faces a maximum sentence of three years in prison.


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