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

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

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