UBS used 'cloak of secrecy' on US tax

[seafan]

Source: Financial Times

US Congressional investigators will on Thursday accuse UBS (NYSE:UBS) and Liechtenstein's LGT Group of using the "cloak of bank secrecy laws" to help American clients evade billions of dollars in taxes.
A 100-page report to be released by the Senate permanent subcommittee on investigations details allegations about how the banks "colluded" with US clients to help them shield taxable income from regulators even though they knew their clients were seeking to hide from the Internal Revenue Service.

.....

Methods allegedly used by LGT included advising US clients to open accounts in the name of foundations to hide ownership and counselling them on the use of offshore structures and "transfer corporations" to disguise transfers via LGT accounts.

UBS told committee investigators it holds 19,000 accounts worth roughly $18bn for US clients that it has not declared to the IRS. In 2001, when new tax rules under the so-called Qualified Intermediary programme required foreign banks to disclose the names of clients holding US securities, UBS's US clients in Switzerland sold more than $2bn in such assets to avoid disclosure, the report claims.

"UBS allowed these clients to continue to maintain accounts in Switzerland, and helped them to reinvest in other types of assets that did not trigger reporting obligations to the IRS, despite evidence that the US clients were using the accounts to hide assets from the IRS," the report found.

Read more: http://us.ft.com/ftgateway/superpage.ft?news_id=fto071620082231250378

[hatrack]

1. And who works for UBS? Oh, yeah, that's right - PHIL GRAMM - their VICE CHAIRMAN

:eyes:

[Trillo]

4. Does that mean that UBS is formally part of "the corporatist?" nt

[tridim]

2. I knew something was up when UBS started advertising heavliy on American TV.

[Turbineguy]

3. Obviouslly this cloak of secrecy

isn't working too well. I recommend the "Cone of Silence" in future.

[seafan]

5. Opening accounts in the name of foundations... will we see Jeb Bush, the 'education governor'?

He's rolling up to his eyeballs in *educational foundations.*

Time will, indeed, tell.

[elehhhhna]

9. Have you noticed all the politicians have their own foundations and "private charities"

now? Hmmmm.

[Barrett808]

6. Wasn't UBS a Bush family property, until recently?

They bought a big chunk of Enron post-collapse, and Enron's trading records were whisked out of the country to Switzerland...

[ozymandius]

8. Many have asked WTF?

http://www.johnmugarian.com/2006/05/ubs_enron_and_former_senator_p.html

UBS, Enron, and Former Senator Phil Gramm

While former US Senator Phil Gramm's wife, Wendy Gramm was a member of Enron's audit committee, and also serving on the company's of the Board of Directors, UBS was a consultant for the State of California in 2002 to help fix the State's energy crisis.

Shortly after, Enron went bankrupt, and Gramm resigned taking a job with UBS Warburg as a Vice President.

After Enron went bankrupt, UBS Warburg bought Enron's energy trading operations. UBS PaineWebber which is a subsidiary of UBS Warburg, was in charge of Enron's employee stock option program.

There's more. Much more.

This whole story has the charm of a prison riot. Scratch the veneer and the flimsy pro-Enron arguments about California's power crisis crumble into dust.

[LeftHander]

7. Names....we want to see who is in the 18,000 names....nt

[WCGreen]

10. Well, I guess they went and hired Harry Potter for Security