Wegelin, Switzerland's oldest private bank, is to close permanently after pleading guilty to helping US citizens evade taxes on money held in offshore accounts.
Wegelin, Switzerland’s oldest private bank, is to close permanently after pleading guilty to helping US citizens evade taxes on money held in offshore accounts.
The bank agreed to pay $57.8m in fines to US authorities in a New York court yesterday, and said it would “cease to operate” following the ruling.
It admitted it had allowed over 100 American citizens to hide $1.2bn from the Internal Revenue Service over the past decade.
Wegelin, founded in 1741, is the first overseas bank to plead guilty to tax evasion charges in the US.
The ruling could have implications for a number of other, larger Swiss banks currently under investigation by US authorities.
That process began in earnest in a 2009 deal with UBS, wherein the bank admitted helping US citizens avoid paying taxes – though it did not plead guilty to any charges – and agreed to pay a $780m fine and turn over client names to US authorities.
US attorney Preet Bharara said the Wegelin ruling represents “a watershed moment in our efforts to hold to account both the individuals and the banks – wherever they may be in the world – who are engaging in unlawful conduct that deprives the US Treasury of billions of dollars of tax revenue”.
“The bank wilfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from US law enforcement,” he added.
This article was first published on Investment Week