US authorities have charged Switzerland’s
oldest private bank Wegelin with helping US taxpayers hide more
than $1.2bn from the Internal Revenue Service (IRS). They have also
seized $16m in assets held in a US-based Wegelin account.
The indictment by the US Department of Justice
(DOJ) is the first time an overseas bank has been charged with
facilitating US tax fraud.
The civil case follows on from the criminal
charges brought in January against three of Wegelin’s Zurich-based
client advisers: Michael Berlinka, Urs Frei and Roger
Accused of courting ex-UBS
The US Attorney’s Office indictment accused
the trio of trying to capture business lost by UBS and another
unnamed Swiss bank, likely to be Credit Suisse.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below formBy GlobalData
The indictment alleged that Berlinka, Frei and
Keller opened and serviced dozens of undeclared accounts for US
taxpayers in 2008 and 2009 after it was reported that the IRS was
investigating UBS for helping US taxpayers evade taxes and hide
assets in Swiss accounts.
Berlinka, Frei and Keller are alleged to have
told clients that their undeclared accounts would be safe at their
bank because it had a long tradition of secrecy and had no offices
Scheme used personal email
According to the DOJ, Wegelin allegedly
created a scheme that allowed its US taxpayer-clients to obscure
the source of their undeclared accounts in Switzerland and access
them in US through a correspondent bank account that it held at UBS
The DOJ also alleged that Wegelin:
- opened and serviced undeclared accounts for US taxpayer-clients
in the names of sham corporations and foundations formed under the
laws of Liechtenstein, Panama, Hong Kong;
- permitted certain US taxpayer-clients to open and maintain
undeclared accounts at Wegelin using code names and numbers to
minimise references to the actual names on Swiss bank
- ensured account statements and other mail for US
taxpayer-clients were not mailed to them in the US;
- communicated with some US taxpayer-clients using their personal
email accounts to reduce the risk of detection by law
Regulatory pressure forces
Pressure from US authorities in connection
with the alleged tax fraud forced Wegelin to sell its non-US
private banking business to Raifeissen Group last week.
Wegelin & Co will now be run as an
independent private bank, Notestein Private Bank, within the
Wegelin had not responded to PBI’s
request for comment at the time this story was posted.