Iconic Swiss bank to close its doors after pleading guilty to US tax evasion charges
Wegelin & Co, the oldest Swiss private bank, said yesterday it would shut its doors permanently after more than 250 years, following its guilty plea to charges of helping wealthy Americans evade taxes through secret accounts.
The plea, in US District Court in Manhattan, marks the death knell for one of Switzerland's most storied banks, whose original European clients pre-date the American Revolution. It is also potentially a turning point in a battle by US authorities against Swiss bank secrecy.
A major question was left hanging by the plea: has the bank turned over, or does it plan to disclose names of American clients to US authorities?
That is a key demand in a broad US investigation of tax evasion through Swiss banks.
"It is unclear whether the bank was required to turn over American client names who held secret Swiss bank accounts," said Jeffrey Neiman, a former federal prosecutor involved in other Swiss bank investigations.
"What is clear is that the justice department is aggressively pursuing foreign banks who have helped Americans commit tax evasion," he said.
Charles Miller, a justice department spokesman, declined to comment immediately.
Wegelin admitted to charges of conspiracy in helping Americans evade taxes on at least $1.2bn (€919m) for nearly a decade. Wegelin agreed to pay $57.8m to the US in restitution.
Otto Bruderer, a managing partner at the bank, said in court that "Wegelin was aware that this conduct was wrong".
He said that "from about 2002 through about 2010, Wegelin agreed with certain US taxpayers to evade the US tax obligations of these US taxpayer clients, who filed false tax returns with the IRS".
When Wegelin last February became the first foreign bank in recent memory to be indicted by US authorities, it vowed to resist the charges. The bank, founded in 1741, was declared a fugitive when its executives failed to appear in a US court.
The surprise plea effectively ended the US case against Wegelin, one of the most aggressive bank crackdowns in US history.
Although Wegelin had about a dozen branches, all in Switzerland, at the time of its indictment, it moved quickly to wind down its business. (Reuters)