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

   

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

Earnings Season

Earnings Season

Reliance Q4 sales rise, refining margin narrows.  Read 

Innovative Solution

Innovative Solution

Turning smog into jewels - a Dutch designer's solution to Beijing's pollution.  Video 

Insider Trading

Insider Trading

Rajaratnam's brother loses bid to dismiss insider trading charges.  Full Article 

Literary Giant Dies

Literary Giant Dies

Mourning and memories in Gabriel Garcia Marquez's languid hometown.  Full Article 

S&P on India

S&P on India

S&P: India's ratings to depend on next govt econ, fiscal policies.  Full Article 

Ambitious Aim

Ambitious Aim

In green car race, Toyota adds muscle with fuel-cell launch.  Full Article 

Bond Market

Bond Market

A star abroad, RBI boss riles bond traders at home  Full Article 

Reuters India Mobile

Reuters India Mobile

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