Yahoo Finance Swiss Bank Wegelin To Close After Tax Probe
The oldest Swiss private bank is to close after pleading guilty to helping wealthy Americans evade their taxes through secret accounts.
Wegelin & Co, founded in 1741, admitted charges of conspiracy in helping US taxpayers hide at least $1.2bn (£747m) for nearly a decade.
The plea, in a New York court, sounded the death knell for one of Switzerland's most storied banks, whose original European clients pre-date the American Revolution.
The bank agreed to pay $57.8m (£35.9m) to the United States in compensation and fines.
Otto Bruderer, a managing partner at the 271-year-old bank, told the court: "Wegelin was aware that this conduct was wrong."
He said that "from about 2002 through about 2010, Wegelin agreed with certain US taxpayers to evade the US tax obligations of these US taxpayer clients, who filed false tax returns with the Internal Revenue Service".
The case against Wegelin is one of the most aggressive bank crackdowns on overseas tax evasion in US history.
It remains unclear whether the bank is required to reveal the details of its American clients.
The fate of three of its bankers - Michael Berlinka, Urs Frei and Roger Keller - indicted in January 2012 on charges later modified to include the bank, also remains up in the air.
The bank initially vowed to resist the charges last February and was declared a fugitive from justice when its Swiss-based executives failed to appear in court.
It claimed because it only had branches in Switzerland it could not be prosecuted by the US, adding that its actions were not in violation of Swiss law.
But in a statement on Thursday from its headquarters in the remote town of St Gallen near the German-Austrian border, it announced it would "cease to operate as a bank" once the matter was concluded.
Since its indictment it has moved quickly to wind down its business, partly through a sale of its non-US assets to regional Swiss bank Raiffesen Gruppe.
In a statement after the plea, assistant US Attorney General Kathryn Keneally said it was a top Justice Department priority "to find those who continue to shirk their tax obligations," as well as those who help them and profit from it.
In 2009, UBS (Berlin: UBRA.BE - news) the largest Swiss bank, entered into a deferred-prosecution agreement with US tax authorities on matters related to tax evasion and agreed to turn over the names of 4,450 clients and pay a $780m (£485m) fine.
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