Portola Valley resident Christopher B. Berg pleaded guilty on Wednesday, Jan. 30, to charges by the U.S. Department of Justice that he willfully failed to inform tax authorities about $642,069 he held in a Swiss bank account in 2005. Had the existence of the account been disclosed, Mr. Berg would have had a tax liability of $270,757, according to a Justice Department statement.

The defendant made his plea before the U.S. District Court in San Jose. His sentence, scheduled to be delivered at a hearing on July 8, 2013, could be as high as $250,000 in fines and as many as five years in prison, prosecutors said.

Mr. Berg set up an account in 2000 at San Francisco offices of the Swiss bank UBS "to shelter a portion of his consulting income from taxation," prosecutors said. Between 2001 and 2005, he used wire transfers to make deposits at UBS, money he used in Europe to buy a vehicle, obtain cash and pay his traveling expenses.

He did not inform his accountant of the existence of the UBS account nor did he disclose the deposits and income earned on those deposits, prosecutors said. The law requires U.S. citizens to disclose the existence of foreign accounts and any interest in or authority over such accounts with assets valued at more than $10,000.

"Individuals who shirk their civic duty and evade taxes by hiding their income and assets in offshore accounts are making a very poor choice," said Kathryn Keneally, Assistant Attorney General for the Justice Department's Tax Division. "They risk criminal prosecution and jail, still owe the taxes due and may lose most of those assets to severe civil penalties."

"Those who hide their assets and income in offshore accounts should realize that there is no safe haven from the IRS," said Richard Weber, Chief Internal Revenue Service Criminal Investigation. "Mr. Berg admitted he disregarded his legal responsibility to file the required report of a foreign bank account and report all his income and interest. He now faces substantial monetary penalties and the risk of incarceration. Combating offshore tax evasion continues to be one of the IRS' top priorities."

Investigators from the IRS uncovered the details of the case, and the prosecutors were trial attorneys from the Justice Department Tax Division.

— Dave Boyce

Are you receiving Express, our free daily e-mail edition? See a sample and sign-up for Express.