News

Swiss bank enters guilty plea for US tax evasion schemes

June 8, 2017

The US Department of Justice (DOJ) and the US Internal Revenue Service (IRS) have announced that a Swiss private bank (Wegelin & Co.) entered a guilty plea before a US District Court for conspiring with US taxpayers and others to hide more than USD 1.2 billion in secret Swiss accounts and to evade US taxes on the income earned in those accounts. The announcement was made in a US Attorney Southern District of New York Press Release dated 3 January 2013.
Details as following

According to the Press Release, the Swiss bank, among other things, took the following steps for US tax avoidance:

  • opening and servicing undeclared accounts for US taxpayers in the names of sham entities formed under the laws of Liechtenstein, Panama, Hong Kong, and other jurisdictions;
  • accepting documents that falsely declared that the beneficial owners of such accounts were the sham entities, rather than the US taxpayers, and making them part of the bank's client files;
  • ensuring that account statements and other mail for US taxpayers were not mailed to them in the United States; and
  • issuing checks drawn on, and executing wire transfers through, a US correspondent bank account for the benefit of US taxpayers.

The Swiss bank was charged in a superseding indictment on 2 February 2012 and the US government filed a civil forfeiture complaint to seize all the funds in the bank's correspondent account, which was maintained at UBS AG in Stamford, Connecticut. In April 2012, a US district court judge ordered forfeiture of more than USD 16.2 million from the correspondent account.
The Press Release states that, as part of its guilty plea, the Swiss bank agreed to:

  • restitution of USD 20 million to the IRS;
  • a fine of USD 22.05 million; and
  • the civil forfeiture of an additional USD 15.8 million, representing the gross fees earned by the bank on the undeclared accounts of US taxpayers.

Together with the April 2012 forfeiture, the Swiss bank's total payments to the United States amount to approximately USD 74 million.

IBFD source

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