Swiss Bank UBS Settles With US; Will Pay $780M, Name Client Names
Posted Feb 18, 2009 7:31 PM CST
By Martha Neil
Updated: In a clash between U.S. tax law and a longstanding international tradition of secret accounts, a Swiss bank has blinked first.
Although UBS AG had resisted handing over to the feds names of American residents who are private banking clients, it has now agreed to do so, the U.S. Department of Justice and Securities and Exchange Commission have announced. The bank will name about 250 client names and pay a $780 million fine, in exchange for a deferred prosecution agreement in the criminal case, reports the Wall Street Journal (sub. req.).
It concerns suspected tax evasion by American private banking clients, with the alleged help of the bank, which may have earned more than $100 million in annual fees from holding an estimated $20 billion in assets for U.S. residents. The bank is accused of having sent representatives armed with laptop computers here to sign up clients, the Washington Post reports.
A separate civil tax action is ongoing, and UBS retains the right to challenge a court subpoena in that case that could require the bank to turn over another 10,000 or more client names to American authorities, the WSJ notes.
And that challenge will apparently soon be forthcoming: In a subsequent filing in federal court in Miami on Feb. 19, the feds are seeking to require UBS to name many more names. Details are provided in a new ABAJournal.com post.
ABAJournal.com: "UBS Probe Puts 300 Americans, Maybe Many More, in IRS Sights"
New York Times: "Bank Asks Offshore Clients to Sign Tax Forms"
Updated at 1 p.m. on Feb. 19 to include link to subsequent ABAJournal.com post on new filing.