UBS Admits Tax Evasion Scheme
February 19, 2009 by Pegagus Pendrean
UBS Admits Tax Evasion Scheme – Switzerland’s largest bank, UBS, has admitted helping wealthy Americans to evade US income taxes. According to US reports, the bank is now rolling over on those same clients, closing their accounts and ratting on them to the Internal Revenue Services (IRS).
UBS, the largest bank in Switzerland, agreed on Wednesday to divulge the names of well-heeled Americans whom the authorities suspect of using offshore accounts at the bank to evade taxes. The bank admitted conspiring to defraud the Internal Revenue Service and agreed to pay $780 million to settle a sweeping federal investigation into its activities.
The Securities and Exchange Commission (SEC) also reached an agreement to resolve claims that UBS acted as an unregistered broker-dealer and investment adviser to U.S. citizens who held accounts directly or in the names of others.
The US Justice Department announced late Wednesday:
“UBS admitted to conspiring to defraud the United States by impeding the IRS,”
“in an unprecedented move” based on an order by Swiss authorities has agreed “to immediately provide the U.S. government with the identities of, and account information for, certain U.S. customers of UBS’s cross-border business”.
The Justice Department had accused UBS of conspiring to defraud the U.S. by helping 17,000 Americans hide accounts from the Internal Revenue Service. UBS will immediately turn over names of about 250 clients, according to people familiar with the matter.
By gaining those names, the U.S. will pierce the veil of Swiss bank secrecy. The IRS, which has sought the names of all U.S. account holders since July, has met resistance from the Swiss government. The final number of account holders which UBS must disclose will hinge on future legal battles, according to the agreement.
UBS Chairman Peter Kurer, 59, said in a statement after the accord was unsealed yesterday in federal court in Fort Lauderdale, Florida:
“UBS sincerely regrets the compliance failures,”
“Client confidentiality, to which UBS remains committed, was never designed to protect fraudulent acts or the identity of those clients, who, with the active assistance of bank personnel, misused the confidentiality protections.”
Settlement Estimates – The $780 million is lower than previous settlement estimates, which exceeded $1 billion. The U.S. government agreed to the lower amount because of the bank’s eroding financial condition, according to a person familiar with the matter.
UBS posted the biggest ever annual loss for a Swiss firm last Tuesday and is cutting some 2,000 jobs as it reported reported a 8.1 billion Swiss franc ($7 billion) net loss in the fourth quarter…UBS Makes Record Loss
[...] The suit stems from UBS’s agreement last week to turn over to U.S. authorities the names of 250 wealthy Americans suspected of using secret UBS offshore accounts and entities to evade taxes. See our previuus article…UBS Admits Tax Evasion Scheme [...]