WASHINGTON — The Justice Department on Thursday filed a six-count indictment against three former UBS bankers — Peter Ghavami, Gary Heinz and Michael Welty — for participating in fraud schemes and conspiracies in connection with the bidding on contracts for municipal bonds from 2001 until 2006.
Heinz was also charged with witness tampering. After he learned of the Justice antitrust probe of the muni market in November 2006, he allegedly told another individual to meet with a second person to coordinate stories about a rigged deal, the department said.
According to the indictment, Ghavami, Heinz and Welty conspired with employees of various financial institutions to manipulate the bidding process for the agreements and contracts, by discussing with co-conspirators the price or price level their employers intended to bid and determining with their co-conspirators which financial institution would win a particular investment agreement or municipal finance contract.
The indictment also alleges that Ghavami, Heinz and Welty and their co-conspirators falsely certified that the bidding process on rigged deals was competitive and in compliance with U.S. Treasury Department regulations.
That caused the municipal issuers to award investment agreements and other municipal finance contracts to providers that otherwise would not have been awarded the contracts, and in some instances, deprived the Internal Revenue Service and Treasury of money to which they were entitled.
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