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New York--A prominent New York diamantaire was sentenced to a year and a day in federal prison this week for hiding more than $7.1 million in a Swiss bank account so he didn’t have to pay taxes on it.

Richard Werdiger, of Diamond Trading Co. sightholder Michael Werdiger Inc. and Eloquence Corp., was sentenced Wednesday by U.S. District Judge Paul G. Gardephe for defrauding the Internal Revenue Service, filing false federal income tax returns and evading about $400,000 in taxes.

The 64-year-old Werdiger, a resident of Purchase, N.Y., was one of seven people arrested in April 2010 amidst a probe of Swiss bank UBS AG. He pled guilty in March.

“For over two decades, Richard Werdiger engaged in an elaborate subterfuge to avoid paying his fair share of taxes to the U.S. government,” Manhattan U.S. Attorney Preet Bharara said. “As his case shows, along with the many others we are prosecuting who use offshore accounts to hide their income and assets, we will find tax cheats of all stripes and they will be punished.”

According to the U.S. Attorney’s Office, between 1986 and 1988 Werdiger opened bank accounts at UBS under the name of fake, Liechtenstein-based foundations in order to evade paying taxes on money he had inherited from his father.

Werdiger instructed UBS to allow him to use the code name “Trygon” to communicate with the bank.

In late 2000, he opened up another account at UBS in the name of a sham corporation based in Panama, a move that allowed him to continue to invest U.S. securities without having UBS notify the IRS of his identity or withhold taxes on income arising out of his holding U.S. securities.

According to the U.S. Attorney’s Office, Werdiger, in turn, used this money to pay off debt incurred by his jewelry companies.

As of Dec. 31, 2004, his UBS accounts contained more than $7.1 million. Between 2000 and 2008, these accounts earned him more than $1.3 million in income, for which $400,000 in taxes should have been paid.

In addition to the prison sentence, Werdiger was ordered to pay a $3.8 million civil penalty for failing to report his overseas bank accounts to the IRS, fined $500,000 and ordered to pay a $600 special assessment. The U.S. Attorney’s Office will determine restitution at a later date.

Of the seven people arrested along with Werdiger last spring, all but two have pled guilty. Those cases are pending.