April 20, 2021

Wegelin Ordered to Pay $74 Million in Tax Plea

LONDON — Wegelin Co., Switzerland’s oldest private bank, said Tuesday it was ordered by a U.S. judge to pay a total of $74 million after pleading guilty to violating U.S. tax laws by helping Americans evade taxes.

The bank, which was founded in 1741, said U.S. District Judge Jed S. Rakoff in New York ruled that the fine, which had been agreed upon earlier with the prosecution, was appropriate. The sum includes fines, restitution and forfeiture proceeds and will be paid from funds the bank had set aside for legal proceedings.

Wegelin, which said it would soon shut down, said it was “pleased” about the ruling and that the case, which started a year ago, was now closed.

The Wegelin case was part of the Obama administration’s sweeping crackdown on Americans who use offshore banks to evade taxes.

Wegelin had acknowledged claims that it hid more than $1.2 billion in secret accounts for American clients. Its guilty plea, entered in January, marked the first time a foreign financial institution had pleaded guilty to U.S. tax law violations.

As part of the push to eliminate tax cheats, a U.S. grand jury in New York indicted Wegelin in February 2012. The company’s elaborate scheme involved its Swiss bankers’ opening secret accounts for U.S. clients using code names and setting up sham entities to avoid detection in far-flung locales, including Panama and Liechtenstein.

In 2009, UBS, another Swiss bank, avoided criminal charges by striking a so-called deferred prosecution agreement in which it paid a $780 million fine and turned over the names of about 4,500 clandestine accounts believed to hold the assets of American taxpayers.

Peter Lattman contributed reporting from New York.

Article source: http://www.nytimes.com/2013/03/06/business/global/06iht-wegelin06.html?partner=rss&emc=rss

Speak Your Mind