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Julius Baer settling U.S. tax case, ex-bankers to plead guilty-source

NEW YORK (Reuters) – Two former Julius Baer bankers are expected to plead guilty on Thursday for helping wealthy American clients evade taxes as U.S. prosecutors unveil a $547 million settlement with the Swiss bank, a person familiar with the matter said.

Daniela Casadei and Fabio Frazzetto, former client advisers at Julius Baer, are expected to plead guilty in federal court in Manhattan, the source said, two days after the Swiss citizens arrived in the United States to face the charges.

The U.S. Justice Department is, meanwhile, expected to announce a deferred prosecution agreement with Julius Baer, which in December disclosed having reached a $547.25 million settlement with U.S. authorities, the person said.

Representatives for Manhattan U.S. Attorney Preet Bharara and Julius Baer declined to comment.

Bharara’s office had earlier issued an advisory saying that Casadei, 52, and Frazzetto, 42, would appear in court, using language indicative of guilty pleas.

The prospective settlement and pleas follow an investigation born out of a U.S. crackdown on offshore tax evasion by Americans through Swiss banks.

Casadei and Frazzetto were indicted in 2011 for conspiring to help U.S. taxpayers hide more than $600 million in offshore accounts and evade paying taxes.

Both would normally be beyond the reach of U.S. extradition, as Switzerland does not extradite its citizens.

The U.S. tax evasion crackdown has already resulted in charges against a number of bankers, lawyers and advisers and billions of dollars in settlements with Swiss banks.

The U.S. Justice Department last week announced the final settlement in a program that resulted in deals with 80 banks for $1.36 billion to avoid possible prosecution.

Banks already under criminal investigation like Julius Baer, though, were not eligible for the program, which required the banks to provide detailed information on the accounts of U.S. taxpayers under investigation.

In 2014, Swiss banking giant Credit Suisse pleaded guilty to conspiring to aid and assist U.S. taxpayers in filing false tax returns in a $2.6 billion settlement.

The penalty was more severe than the $780 million that rival UBS AG agreed to pay in 2009 as part of a deferred prosecution deal.

Wegelin & Co, which had been the oldest Swiss private bank, was meanwhile forced to close after agreeing in 2013 to plead guilty to conspiracy to evade taxes and pay $74 million.

The case is U.S. v. Casadei, U.S. District Court, Southern District of New York, No. 11-cr-00866.

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