In a shock move, Wegelin,
Switzerland's oldest bank, is to shut its doors for ever after pleading guilty
in a New York court to helping over 100 Americans evade over a billion dollars
in taxes over a 10 year period.
The bank, which was established in 1741, admitted in
court that it had intentionally opened accounts for US citizens to help them
avoid tax and has been fined $57.8m.
Otto
Bruderer, a managing partner at the bank, told the court: "Wegelin was aware that this conduct was
wrong.....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".
It becomes the first foreign bank to plead guilty to
tax evasion charges in the US, although it is certainly not the only bank under
investigation in a clamp down by the US Justice Department.
Four years ago UBS agreed to pay a $780m fine to US
authorities in relation to tax evasion charges and agreed to reveal the details
of US account holders, but it was not technically convicted of any crime –
agreeing voluntarily to pay a fine in exchange for charges being dropped.
Credit Suisse, the other huge Swiss banking monolith,
remains under investigation by the US authorities.
It had been expected that Wegelin would fight the
charges on the basis that because it only had branches in Switzerland, it was
bound only by its home country's banking laws.
However, the surprise move to throw in the towel will come as a blow to
Swiss banks and to the Swiss government, which has been trying for months to
negotiate a deal with the US which would protect Switzerland's banking secrecy.
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