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.
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.