Authorities: NY Judge Opens Door to Swiss Records
January 28, 2013 (Associated Press) NEW YORK - A federal judge on Monday authorized the Internal Revenue Service to require UBS AG to produce records about U.S. taxpayers who may hold bank accounts in Switzerland to evade hundreds of millions in federal income taxes.
U.S. District Judge William H. Pauley III signed an order authorizing the IRS to issue a summons for information about U.S. taxpayers who may hold accounts at the Swiss bank Wegelin & Co. and other Switzerland-based banks.
Wegelin has no U.S. branches but uses a UBS account to conduct business here, which is why the order applies to UBS.
U.S. Attorney Preet Bharara said the summons was "the latest step in our efforts to identify and prosecute U.S. taxpayers who think they can evade their legal responsibility to pay taxes by secreting their money away in anonymous off-shore accounts at Wegelin and other banks, and to recover hundreds of millions of dollars that is owed to the IRS."
Wegelin pleaded guilty Jan. 3 to conspiring with at least 100 U.S. taxpayers to hide more than $1.2 billion in secret Swiss bank accounts from 2002 to 2011, agreeing to pay $74 million in all, including fines and restitution. At the time, prosecutors said Wegelin in 2008 and 2009 opened and serviced dozens of new accounts for U.S. taxpayers as it tried to capture clients lost by UBS after word surfaced that that UBS was being investigated for helping U.S. taxpayers evade taxes and hide assets in Swiss bank accounts.
Wegelin employees told U.S. taxpayer-clients that their undeclared accounts would not be disclosed to U.S. authorities because the bank had a long tradition of secrecy, prosecutors said. They added that the employees persuaded U.S. taxpayer-clients to move money from UBS to Wegelin by claiming that, unlike UBS, Wegelin did not have offices outside of Switzerland and would be less vulnerable to U.S. law enforcement.
Wegelin, headquartered in St. Gallen, Switzerland, said in a statement at the time of the plea that it had cooperated with the probe "within the bounds allowed for by Swiss law" since learning that it was under U.S. investigation.
A message left with a lawyer for UBS for comment was not immediately returned.