Swiss banking giant UBS agreed to pay $780 million and identify certain US customers in a deal to resolve criminal fraud charges that it assisted rich American clients in evading taxes, the Justice Department said last night.
It said that Switzerland's largest bank has entered into what is known as a deferred prosecution agreement on charges of conspiring to defraud the United States by impeding the US tax collection agency, the Internal Revenue Service.
Department officials said the agreement was unprecedented in pulling aside Switzerland's much-vaunted tradition of bank secrecy and described it as one of the biggest settlements ever. They said UBS admitted to helping US taxpayers hide accounts from the IRS.
The UBS charges and agreement represented the latest court developments in a long-running, high-profile investigation.
In January, the former head of UBS AG's wealth management business, Raoul Weil, was formally declared a fugitive after failing to surrender to US authorities on charges of conspiring to help wealthy Americans hide assets from US tax authorities.
The deal further cracks Switzerland's trademark account secrecy, which helped cement its role as a global banking center but also tainted it with accusations of being a haven for "dirty" money.
In exchange, it frees UBS from prosecution over its actions. The deal also comes a week before a US Senate hearing aimed at pressuring UBS to give more information about Americans who use Swiss bank accounts to avoid paying taxes.
UBS acknowledged that it helped US taxpayers open accounts that concealed their identities from the IRS, the department said.
It said about 17,000 of 20,000 US cross-border clients concealed their identities and the existence of their accounts, with $20 billion in assets, from the IRS. Some of these clients are unindicted co-conspirators.
In an unprecedented move, UBS, under orders from Swiss market regulators, agreed to immediately provide the US government with the identities of, and account information for, certain United States customers, the department said.
Reuters