Friday, February 3, 2012

Swiss Bank Wegelin Indicted for Hiding $1.2 Billion From IRS

Wegelin & Co., the oldest Swiss bank, was indicted Feb. 2 for conspiring with U.S. taxpayers to hide more than $1.2 billion in secret accounts from the Internal Revenue Service, the Justice Department announced in unsealing the grand jury indictment from a federal court in Manhattan (United States v. Wegelin,S.D.N.Y., No. 81 12 Cr. 02 (JSR), indictment 2/2/12).

Seizing more than $16 million from Wegelin's bank account in the United States under civil forfeiture laws, DOJ said Wegelin had been charged in the U.S. District Court for the Southern District of New York with participating in a conspiracy with three client advisors who have already been charged.

Although Wegelin has no banks in the U.S., it is accused of using a UBS AG account to carry out the conspiracy, which involved opening and servicing dozens of undeclared accounts for U.S. taxpayers to capture clients who were fleeing UBS after news broke that IRS was investigating that Swiss bank.

According to the indictment, Wegelin told various U.S. taxpayer-clients that their undeclared accounts would not be disclosed to U.S. authorities because the bank had a long tradition of secrecy and that the lack of offices in the United States made the company less vulnerable to U.S. authorities.

1 comment:

  1. Swiss private bank Julius Baer sees no sign U.S. indictment pending, confident of resolution to U.S. tax probe.

    Swiss private bank Julius Baer said on February 6 it was confident that it would not be indicted by the U.S. for aiding taxpayers evade their U.S. tax obligations and that a mutually satisfactory resolution to an ongoing U.S tax probe would be reached. "[We have] no sign of an indictment, nor do we expect this to change," Julius Baer Chief Executive Boris Collardi told analyst and media following 2011 earnings. He added constructive talks with

    U.S. authorities are ongoing.
    Last week, the DOJ indicted Wegelin & Co., Switzerland's oldest private bank, on charges that it enabled persons to evade their U.S. tax obligations. Further inflaming the situation, the U.S. alleges Wegelin sought to seek clients from UBS as the U.S. was stepping up its efforts to crackdown on UBS from 2007 to 2009.

    "We've taken an early, proactive approach with the U.S., taken measures including the U.S. exit in 2009 at our own decision, and have an ongoing constructive dialogue," Collardi said. Julius Baer said it expected to pay a fine as a result of the investigation, although it noted that last week's indictment of Swiss private bank Wegelin has not influenced its ongoing discussion with U.S. officials.

    The bank said it expects to have to hand over client data as part of a U.S. tax investigation into persons who may have evaded their U.S. tax obligations using undisclosed Swiss accounts. "We expect to have to deliver client information within the regulatory framework that will be agreed between the two governments," Collardi said.