Oldest private Swiss bank pleads guilty in U.S. tax evasion case

NEW YORK Thu Jan 3, 2013 11:51pm IST

The logo of the Swiss Wegelin bank is pictured at the headquarters building in St. Gallen, January 29, 2012. REUTERS/Miro Kuzmanovic/Files

The logo of the Swiss Wegelin bank is pictured at the headquarters building in St. Gallen, January 29, 2012.

Credit: Reuters/Miro Kuzmanovic/Files

Related Topics

Stocks

   
Priyanka Gandhi Vadra, daughter of Congress party chief Sonia Gandhi, adjusts her flower garlands as she campaigns for her mother during an election meeting at Rae Bareli in Uttar Pradesh April 22, 2014. REUTERS/Pawan Kumar

Election 2014

More than 814 million people — a number larger than the population of Europe — are eligible to vote in the world’s biggest democratic exercise.  Full Coverage 

NEW YORK (Reuters) - Wegelin & Co, the oldest Swiss private bank, pleaded guilty on Thursday to a criminal charge of conspiracy for helping wealthy Americans to evade taxes on at least $1.2 billion hidden in offshore bank accounts.

The plea came at a hearing before Judge Jed Rakoff in U.S. district court in Manhattan. Wegelin was the first foreign bank to be indicted by U.S. authorities in recent history. The indictment, announced last February, shook the storied world of Swiss banking.

"Wegelin was aware that this conduct was wrong," Otto Bruderer, a managing partner at Wegelin, said at the hearing.

Under a plea agreement, Wegelin agreed to pay $57.8 million, which includes of $20 million in restitution to the Internal Revenue Service and a civil forfeiture of $15.8 million, the U.S. Justice Department said.

It also agreed to a $22.05 million fine, the Justice Department said. Rakoff, who must approve the fine, said stipulated guidelines placed the fine at $14.7 million to $29.4 million. Sentencing was set for March 4.

Wegelin in a statement said it had set aside money to pay the fine, restitution and forfeiture.

"Once the matter is finally concluded, Wegelin will cease to operate as a bank," Wegelin said.

The case has signaled a ramping up of pressure on nearly a dozen other Swiss and Swiss-style banks under criminal investigation by the Justice Department.

Last year, the U.S. government seized more than $16 million of Wegelin funds held in a UBS AG (UBSN.VX) account in Stamford, Connecticut, via a separate civil forfeiture complaint.

Because Wegelin has no branches outside Switzerland, it used UBS for correspondent banking services, a standard industry practice, to handle money for U.S.-based clients.

Wegelin, founded in 1741, effectively broke itself up following the indictment by selling the non-U.S. portion of its business.

(Reporting by Nate Raymond, Lynnley Browning and Martin De Sa'Pinto; Editing by Martha Graybow, John Wallace and Steve Orlofsky)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Oil Imports

Oil Imports

India to make May-July oil payments to Iran - sources.  Full Article 

DLF Shares

DLF Shares

DLF slides 3 percent, underperforms rivals.  Full Article 

Global Economy

Global Economy

Chinese factories stalling as euro zone business picks up  Full Article 

Rupee Falls

Rupee Falls

Rupee falls for third day; foreign fund inflows key.  Full Article 

Record High

Record High

BSE Sensex hits record high for third straight day.  Full Article 

M&M Upgraded

M&M Upgraded

Credit Suisse upgrades Mahindra & Mahindra to 'outperform'  Full Article 

Breakingviews

Breakingviews

Manchester United’s crisis has silver lining  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage