[QODLink]
Europe

Storied Swiss bank to shut after US tax trial

Wegelin & Co, founded in 1741, to close after admitting it helped wealthy Americans evade at least $1.2bn in taxes.
Last Modified: 04 Jan 2013 11:16
Dozens of Swiss bankers and their clients have been indicted in recent years [Wegelin & Co]

Wegelin & Co, the oldest private Swiss bank, has said it would shut its doors permanently after more than 250 years following its guilty plea to charges of helping wealthy Americans evade taxes through secret accounts.

The plea, in US District Court in Manhattan, marks the death knell for one of Switzerland's most storied banks, whose original European clients pre-date the American Revolution.

Wegelin on Thursday admitted to charges of conspiracy in helping Americans evade taxes on at least $1.2bn for nearly a decade.

Wegelin agreed to pay $57.8m to the US in restitution and fines.

A major question was left hanging by the plea: has the bank turned over, or does it plan to disclose, names of American clients to US authorities? This is a key demand in a broad US investigation of tax evasion through Swiss banks.

"It is unclear whether the bank was required to turn over American client names who held secret Swiss bank accounts," said Jeffrey Neiman, a former federal prosecutor involved in other Swiss bank investigations who is now in private law practice in Fort Lauderdale, Florida.

"What is clear is that the Justice Department is aggressively pursuing foreign banks who have helped Americans commit overseas tax evasion," he said.

Charles Miller, a Justice Department spokesman, declined to comment immediately.

Surprise plea

Otto Bruderer, a managing partner at the bank, said in court that "Wegelin was aware that this conduct was wrong".

He said that "from about 2002 through about 2010, Wegelin agreed with certain US taxpayers to evade the US tax obligations of these US taxpayer clients, who filed false tax returns with the IRS".

When last February Wegelin became first foreign bank in recent memory to be indicted by US authorities, it vowed to resist the charges.

The bank, founded in 1741, was declared a fugitive from justice when its Swiss-based executives failed to appear in US court.

The surprise plea effectively ended the US case against Wegelin, one of the most aggressive bank crackdowns in US history.

"Once the matter is finally concluded, Wegelin will cease to operate as a bank," Wegelin said in a statement from its headquarters in the remote, small town of St Gallen next to the Appenzell Alps near the German-Austrian border.

Dozens of Swiss bankers and their clients have been indicted in recent years, following a 2009 agreement by UBS AG, the largest Swiss bank, to enter into a deferred-prosecution agreement, turn over 4,450 client names and pay a $780m fine after admitting to criminal wrongdoing in selling tax-evasion services to wealthy Americans.

427

Source:
Agencies
Topics in this article
People
Country
City
Organisation
Featured on Al Jazeera
Italy struggles to deal with growing flood of migrants willing to risk their lives to reach the nearest European shores.
Israel's Operation Protective Edge is the third major offensive on the Gaza Strip in six years.
Muslims and Arabs in the US say they face discrimination in many areas of life, 13 years after the 9/11 attacks.
At one UN site alone, approximately four children below the age of five are dying each day.
Featured
Amid vote audit and horse-trading, politicians of all hues agree a compromise is needed to avoid political instability.
Part of the joint accord aimed at ending the political impasse establishes an independent National Election Commission.
Rights groups say the US prosecution of terrorism cases targets Muslims and are fraught with abuses.
Local painters forgo experimentation to cater to growing number of foreign buyers.
Cyprus is a tax haven and has long attracted wealthy Russians, but it could become a European energy hub.
join our mailing list