April 23, 2010, 4:33 PM EDT

(Adds judge’s comments in fourth paragraph.)

April 23 (Bloomberg) — Jack Barouh, a former watchmaker and ex-UBS AG client, was sentenced to 10 months in prison, the longest term given any customer of the bank since the U.S. began a crackdown on offshore tax evasion.

Barouh, 65, admitted in February that he skimmed money from his company and didn’t report income on $10 million in assets, including $6 million in offshore accounts at UBS. Barouh’s lawyer asked for a sentence of a year’s home detention, saying Barouh is the son of Holocaust survivors who taught him to “hide and hoard” and compulsively “want to establish a secret nest egg.” Prosecutors today asked for a 15-month prison term.

U.S. District Judge Adalberto Jordan granted leniency, saying Barouh cooperated with prosecutors probing offshore tax evasion and tried to voluntarily disclose his account to the Internal Revenue Service. still, the judge said, Barouh deserved prison for his conduct.

“He did this for many years, hiding tens of millions of dollars,” Jordan said in federal court in Miami.

Barouh is among 11 UBS clients who pleaded guilty to tax crimes since the Zurich-based bank agreed in February 2009 to pay $780 million to avoid prosecution for helping wealthy Americans evade taxes. since then, six other clients have been sentenced. Four got probation or home detention, one got two months in prison and another was sentenced to one month.

Barouh, of Golden Beach, Florida, is the former owner of Tempus International Corp., a manufacturer and distributor of luxury watches. he sold the company in 2004 to Fossil Inc. for about $50 million.

‘Ashamed and Embarassed’

“I am ashamed and embarrassed by my conduct,” Barouh told the judge.

Barouh set up so-called nominee accounts through Hong Kong, British Virgin Island and Panamanian companies, including one named Domilou SA, according to court papers. he also had accounts at banks other than UBS and began skimming money from his watch businesses in 1976 and putting the proceeds in his Domilou account, he admitted in pleading guilty.

Barouh turned over the names of two Swiss bank managers and a Swiss lawyer as part of his cooperation with prosecutors, Assistant U.S. Attorney Jeffrey Neiman said today.

Offshore Accounts

The two money managers helped Barouh manage the offshore accounts, according to court papers. one, identified as Swiss money manager No. 1, misappropriated more than $5 million from the Domilou account, he admitted.

The Swiss lawyer, identified as Swiss attorney No. 1, negotiated a settlement with the first money manager. The lawyer used that settlement, as well as funds from Domilou, to set up a British Virgin Island corporation called Similen Investments ltd. for Barouh, according to court papers.

The attorney and Swiss money manager No. 2 were directors of the company, according to court papers.

Starting in 2007, Barouh considered repatriating his accounts to the U.S., according to court papers. The unidentified Swiss attorney instead persuaded him to transfer his assets to a Hong Kong nominee company named Amery Investments ltd.

The case is U.S. v. Barouh, 10-cr-20034, U.S. District Court, Southern District of Florida (Miami).

–With assistance from Carlyn Kolker in New York. Editor: Charles Carter, Fred Strasser

To contact the reporters on this story: David Voreacos in Newark, New Jersey, at dvoreacos@bloomberg.net; Mort Lucoff in Miami at morsybil@bellsouth.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

Ex-Watchmaker Barouh Gets 10 Months in UBS Tax Case