A New York toy salesman pleaded guilty to filing a false tax return that concealed assets at BS AG, and he implicated four other people while detailing the bribery of a Swiss government official.

Jeffrey Chernick, 70, today admitted in federal court in Fort Lauderdale, Florida, he didn’t declare $8 million held at UBS, the largest Swiss bank by assets. He’s the third UBS client to plead guilty since the bank gave more than 250 customer names to the Internal Revenue Service under a Feb. 18 agreement to avoid prosecution for helping wealthy Americans evade taxes.

The plea is “part of a much larger and coordinated effort” by the U.S. to “aggressively find and crack down on tax evaders” cloaking wealth overseas, IRS Commissioner Douglas Shulman said in a statement. “For those still hiding in this shadowy world, it is time to come in and get right with your government or face stiff criminal and financial penalties.”

Chernick, who is helping prosecutors, implicated two unidentified UBS client advisers, a Swiss attorney and an executive at an unidentified smaller Swiss bank. His admissions show that the Justice Department has detailed information on a second Swiss bank that he says helped Americans evade taxes by hiding behind the shield of Switzerland’s bank-secrecy laws.

Chernick’s guilty plea came one day before a federal judge in Miami will hold a telephone status conference on a U.S. lawsuit against UBS seeking the names of 52,000 account holders as part of a crackdown on offshore tax evasion.

Voluntary Disclosure

Media coverage of the Justice Department’s probe of UBS was intensifying in July 2008, when Chernick told the attorney and the executive that he wanted to make a voluntary disclosure to the IRS of his offshore accounts, according to court papers.

The attorney persuaded Chernick “not to take any action with respect to his undeclared Swiss bank accounts, including his accounts at UBS” because of the executive’s connection to a high-ranking government official who could provide the names of UBS clients that would be given to U.S. authorities.

The unidentified executive said that while the names of two other clients would be disclosed, Chernick’s would not, according to court papers.

The executive, who formerly worked at UBS, paid $45,000 to the government official for the information, according to the papers. Chernick used $45,000 from his UBS account to reimburse the executive, according to the papers. It isn’t clear whether the Swiss government later handed over Chernick’s name to the U.S.

Toy Manufacturers

Chernick, of Stanfordville, New York, owns Jeff Chernick Inc., which represents Hong Kong and Chinese toy manufacturers. He admitted that the UBS account was opened in the name of Simba International Ltd., a Hong Kong corporation.

He began setting up offshore accounts in 1981 to conceal his toy sales commissioners from the IRS, court papers show.

UBS had entered into an agreement in 2000 with the IRS to disclose information about certain accounts in which U.S. citizens were the beneficial owners. That agreement was one reason why the unidentified bank executive left UBS for the smaller Swiss bank, according to court papers.

The banker told Chernick that because the smaller Swiss bank had no presence in the U.S. and no agreement to give data to the IRS, the U.S. couldn’t pressure it to disclose his identity and account information, according to court papers. Chernick then agreed to invest with the smaller bank.

The banker, attorney and two UBS executives tried to shield Chernick’s bank statements from U.S. authorities, including physically cutting his name and account number from documents before giving them to him, according to court papers.

Sham Loan

Chernick admitted the unidentified Swiss attorney also advised him on arranging a sham $700,000 loan between Simba and a second Hong Kong entity so that he could buy a 30-acre parcel of land next to his New York home.

Before the guilty plea, a U.S. Magistrate Judge Robin Rosenbaum set Chernick’s bail bond at $5 million. She allowed him to take a pre-paid trip to Africa from Aug. 18 to Sept. 17 for a safari and humanitarian purposes. U.S. District Judge James Cohn, who took the guilty plea, set sentencing for Oct. 30.

Chernick faces as long as three years in prison. He agreed to pay back taxes, fines and penalties for 2001 to 2007, and a 50 percent penalty for the one year with the highest balance.

Chernick’s attorney, Douglas Tween, declined to comment.

On April 14, Florida yacht broker Robert Moran pleaded guilty to filing a false tax return that failed to disclose $3.4 million held at UBS. A Florida accountant, Steven Michael Rubinstein, also pleaded guilty on June 25 to failing to disclose secret accounts he held at UBS.

UBS Avoided Prosecution

UBS, based in Zurich, avoided prosecution by admitting it helped taxpayers hide money in Swiss accounts to dodge paying U.S. taxes. UBS also agreed to make reforms and pay $780 million in fines and penalties.

As part of its agreement, UBS admitted that from 2000 to 2007, its Swiss private bankers helped wealthy Americans evade U.S. taxes by setting up sham offshore companies in tax havens. UBS said it created misleading forms saying those offshore companies, not taxpayers, were the beneficial owners.

The case is United States of America v. Jeffrey Chernick, 09-cr-60182, U.S. District Court, Southern District of Florida (Fort Lauderdale).