Gallen5862 Posted February 20, 2009 Share Posted February 20, 2009 http://www.washingtonpost.com/wp-dyn/content/article/2009/02/18/AR2009021802541_pf.html UBS to Pay $780 Million Over U.S. Tax Charges Swiss Bank to Name Some U.S. Clients By David S. Hilzenrath and Zachary A. Goldfarb Washington Post Staff Writers Thursday, February 19, 2009; D01 UBS, Switzerland's largest bank, agreed yesterday to pay $780 million to settle civil and criminal charges by the U.S. government that it helped thousands of American clients use Swiss accounts to evade U.S. taxes. UBS also agreed to turn over the names of some of those clients. The settlement ended a legal battle that pitted Switzerland's legendary tradition of bank secrecy against the U.S. government's determination to crack down on tax cheats. But how the U.S. government resolved perhaps the central issue in its dispute with UBS was not disclosed, making it hard to assess how much the government gained in its battle against tax evasion. The Justice Department charged that over several years UBS provided Swiss bank accounts to approximately 20,000 U.S. clients with assets of about $20 billion. About 17,000 of those clients concealed their identities and the existence of their UBS accounts from the IRS, the Justice Department alleged. A key question in the investigation was whether the bank and the Swiss authorities would divulge information about all of the thousands of clients the U.S. government suspected of using UBS accounts to evade taxes or only those clients who met the much narrower Swiss legal conditions for parting the curtain of bank secrecy. Under the settlement, UBS agreed to give up the names and account numbers of "certain United States clients." Neither the Justice Department nor UBS would say how many clients the bank would give up or the criteria they will use to identify them. The details were spelled out in a document filed under seal. A Justice Department news release stated that, to avoid being tried on criminal charges, UBS agreed to stop letting U.S. clients use Swiss accounts to hide money from the IRS. However, the commitment wasn't new: The Swiss bank promised to do just that last year. "UBS avoided compliance with U.S. securities laws for many years, at the same time they were engaged in other illegal conduct, which makes this one of the most egregious cases of its kind," Scott W. Friestad, deputy director of enforcement at the SEC, said in a statement. In a statement, UBS chairman Peter Kurer said the bank remains committed to client confidentiality. But Kurer added that confidentiality was not meant to protect fraud or clients who, with the bank's assistance, made "false declarations regarding their tax status." "It is apparent that as an organization we made mistakes and that our control systems were inadequate," UBS chief executive Marcel Rohner said. The settlement allows UBS to delay for up to four years a big chunk of its promised payment to the U.S. government. Under the deal, the U.S. government will make further legal efforts to obtain all the names it has been seeking. However, UBS is explicitly permitted to argue that Swiss law bars it from complying, and the settlement document says that Swiss law may limit the bank's cooperation with U.S. investigations or prosecutions. A Swiss regulatory agency painted a more benign picture of UBS's conduct yesterday, saying it found no indication that the bank's top management knew of legal violations. The improprieties involved "a very small number of cases," the regulator said. The tradition of bank secrecy that was at stake in the case has been one of the pillars of the Swiss economy. That standard had already taken a hit in the investigation. As The Washington Post reported last year, UBS has been closing the accounts of U.S. clients, in effect forcing them out and showing that depositors cannot depend on the bank to shield them. UBS previously turned over names on dozens of clients. With the closure of their accounts, clients who evaded taxes and must now move their money are left in a difficult position, according to tax lawyers. They can come clean with U.S. authorities, or they can hide their money again, which could leave them even more vulnerable to prosecution, the lawyers said. Also left unclear was whether the U.S. government will seek to hold anymore UBS personnel accountable. Executives "at the highest levels of management," as well as lower-ranking managers and employees, are unindicted co-conspirators, according to yesterday's filings. In 2006, executives rejected an internal recommendation that UBS stop providing Swiss accounts to U.S. clients, the government alleged. UBS executives considered that step too costly, the government charged. That business generated annual revenue of up to $200 million for UBS, according to estimates in yesterday's court filings. One top executive, Raoul Weil, was indicted in November for allegedly conspiring to defraud the U.S. government by helping thousands of U.S. clients hide assets from the IRS. At the time, the Justice Department said he was believed to be in Switzerland, where he was legally protected from extradition. In a statement yesterday, an attorney for Weil predicted that Weil will be vindicated. Link to comment Share on other sites More sharing options...
Gallen5862 Posted February 20, 2009 Author Share Posted February 20, 2009 This is good that the United States gets some more money to help pay off some of our debts. This also gives the government a chance to receive tax payments from some of the bank customers. Link to comment Share on other sites More sharing options...
Larry Posted February 20, 2009 Share Posted February 20, 2009 Wondering how many people are filing revised tax returns right now? :halo: Link to comment Share on other sites More sharing options...
PokerPacker Posted February 20, 2009 Share Posted February 20, 2009 well that should cover about .1% of the stimulus Link to comment Share on other sites More sharing options...
Renegade7 Posted February 20, 2009 Share Posted February 20, 2009 That may be a drop in the bucket, but that drop tastes like cotton candy. It's about damn time. Principle, doing what's right, that's the change I voted for. I'm happy because it's a step in the right direction. Link to comment Share on other sites More sharing options...
Larry Posted February 20, 2009 Share Posted February 20, 2009 That may be a drop in the bucket, but that drop tastes like cotton candy. It's about damn time. Principle, doing what's right, that's the change I voted for. I'm happy because it's a step in the right direction. Uh, I think it's real unlikely that this entire thing took place in the last month. Link to comment Share on other sites More sharing options...
Renegade7 Posted February 28, 2009 Share Posted February 28, 2009 Uh, I think it's real unlikely that this entire thing took place in the last month. Okay...and...did I say something that didn't make sense? What do you mean by "taking place in the last month"? I can't tell if you're assuming that I'm stupid or ignorant, but I'm not. Link to comment Share on other sites More sharing options...
twa Posted February 28, 2009 Share Posted February 28, 2009 The change you voted for was W? Link to comment Share on other sites More sharing options...
Mickalino Posted February 28, 2009 Share Posted February 28, 2009 This UBS thread is a major disappointment. I thought it was going to be about this guy http://www.youtube.com/watch?v=s0lqlubVcpM&feature=related Link to comment Share on other sites More sharing options...
Slateman Posted February 28, 2009 Share Posted February 28, 2009 Wow . . . thats a nice chunk of change . . . Link to comment Share on other sites More sharing options...
thelarkascend1ng Posted February 28, 2009 Share Posted February 28, 2009 Okay...and...did I say something that didn't make sense? What do you mean by "taking place in the last month"? I can't tell if you're assuming that I'm stupid or ignorant, but I'm not. I think when you said "change I voted for", Larry assumed with good reason that you were talking about Obama entering office having something to do with this case coming to a head, which is extremely unlikely. Something this big takes ridiculous amounts of time to get together and I highly doubt that anything having to do with our last election was a catalyst for UBS getting called out. Link to comment Share on other sites More sharing options...
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