Monday, February 9, 2015

US Investigates UBS Again!


UBS AG got into trouble with the IRS and Justice Department and changed bank secrecy forever. Eventually, the Swiss Parliament passed a measure enabling banks to hand over client identities to American authorities without violating Swiss bank-secrecy laws. After getting bruised in court battles with the IRS, in 2009, UBS paid $780 million to settle charges that it helped wealthy Americans evade taxes and many Swiss Banks followed suit. 
  • 2009: Switzerland’s biggest bank UBS agrees to turn over more than 4,450 client names and pay a $780 million fine after admitting to criminal wrongdoing in selling tax-evasion services to wealthy Americans.
  • July 2011: The second-biggest bank, Credit Suisse, comes under criminal investigation by US. The bank later makes a provision for a potential fine of CHF295 million.
  • February 2012: US justice department indicts Wegelin, Switzerland's oldest private bank, on charges that it enabled wealthy Americans to evade taxes on at least $1.2 billion hidden in offshore accounts.
  • June 2012: US treasury department reaches a tentative agreement with Switzerland to help banks comply with US tax evasion regulations.
  • June 2012: Bank Julius Baer hands 2,500 employee names to US authorities in a bid to free itself from the tax probe, according to lawyers.
  • August 2012: Global bank HSBC hands over details of current and former employees to the US authorities.
  • November 2012: Private bank Pictet confirms it is also under investigation by the US.
  • December 2012: Two bankers and one former employee of the Z├╝rcher Kantonalbank charged by US, accused of helping US clients avoid taxes.
  • January 2013: Wegelin private bank shuts its doors, following a guilty plea to charges of helping wealthy Americans evade taxes through secret accounts. It agrees to pay nearly $58 million in fines on top of $16.3 million in forfeitures already obtained by the authorities.
  • May 2013: Swiss government presents bill to parliament that would let Swiss banks hand over internal information to US to avoid threatened criminal charges – though the banks still face fines likely to total billions of dollars.The bill aims to save the banks from heavier punishment in the United States for helping wealthy tax cheats, by sidestepping its secrecy laws to let bankers disclose data to US prosecutors.
  • June 2013: Parliament rejects the so-called Lex USA bill, telling the government to make the decision.
  • July 3, 2013: The government announces a new data transfer framework for banks. Finance Minister Eveline Widmer-Schlumpf presents a “plan B”, under which banks which cooperated with the United States authorities would be deemed not to have violated Article 271 of the penal code, which forbids collaboration with foreign authorities.
Federal prosecutors have now launched a new probe into whether Swiss bank UBS AG helped Americans evade taxes through bearer shares and bonds, according to people familiar with the investigation.

The United States Attorneys Office - Eastern District of New YorkProsecutors in the U.S. attorney's office in Brooklyn are weighing evidence gathered with the Federal Bureau of Investigation to determine whether employees of the bank helped facilitate tax evasion or engaged in securities fraud The Swiss bank UBS is said to again be under investigation by US prosecutors, this time for allegedly helping American clients evade tax by using bearer shares and bonds.

UBS was recently served with a subpoena from authorities related to the matter, according to people familiar with the case. Prosecutors and FBI agents recently traveled to London to interview potential witnesses, the people said. It isn't clear when the alleged conduct in the UBS matter is purported to have begun. Investigators believe some potential misdeeds occurred after the expiration of bank's 2009 agreement with the Justice Department, which resolved its previous tax-evasion case and put off any related prosecution as long as the bank didn't get into additional trouble in the following 18 months. The people familiar with the current probe said authorities don't believe the new issues constitute a violation of the terms of that settlement.
People familiar with the investigation.said, bank employees allegedly discussed how to deal with the potential legal problems of such transactions and how they might hide them from authorities. 
For that reason, investigators are trying to determine the exact nature of those alleged discussions and whether they amounted to a criminal effort to conceal what had allegedly already been done.
But not every investigation goes anywhere. Not even every prosecution does. One big loss for the feds was when Mr. Raoul Weil, the top UBS banker, was found not guilty of tax evasion. The government accused Mr. Weil and his subordinates of using sham structures so U.S. clients could sidestep the IRS. Mr. Weil was indicted in 2008, and finally arrested in Italy in 2013, courtesy of Interpol. The indictment claimed that between 2002 and 2007, Mr. Weil’s UBS unit helped 20,000 U.S. clients conceal approximately $20 billion in assets from the IRS.
This came on the heels of an October 31, 2014 acquittal of Shokrollah Baravarian, a retired senior vice president at Israeli-based Mizrahi Tefahot Bank Ltd. in Los Angeles federal court on charges he helped U.S. customers conceal their assets from the Internal Revenue Service. 

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