Fate of UBS hangs on tax evasion case

[Joanne98]

The future of UBS, the giant Swiss bank, rests on the outcome of tense negotiations with US investigators as its long-running multi-billion-dollar tax evasion case concludes this month.

A series of hearings in Washington over the next four weeks will determine whether UBS faces criminal prosecutions and possibly even the loss of its US bank licence.

The bank is being investigated by US authorities for its alleged part in what is claimed to be a massive tax evasion scheme. The US has accused UBS of helping rich Americans hide billions of dollars. Last November, a senior member of the executive board of UBS was charged by US authorities with tax evasion. He has resigned from the board to defend himself. UBS has been co-operating with investigators and has made it plain that it is taking the issue seriously.

The case dates back to when a senior UBS banker signed a US court statement seven months ago detailing how he smuggled diamonds in toothpaste tubes, destroyed offshore bank records on behalf of clients and helped a Florida property tycoon evade taxes of $200m on offshore assets worth $7.26bn.

In a seven-page deposition, the senior manager claimed that he was encouraged to win clients at UBS-sponsored tennis tournaments and art events. UBS bankers, according to legal papers, are accused of helping wealthy Americans conceal ownership of their assets by creating "sham" offshore trusts. In November, UBS stopped using offshore trusts on behalf of its US customers.

The Observer has been told by well-placed sources that the authorities are determined to force UBS to hand over account details of its 17,000 US clients. The bank has indicated it is willing to release details of only 300 of them.

http://www.guardian.co.uk/business/2009/feb/01/ubs-banking

[drm604]

1. 17,000 clients.

This could get very interesting.