Tags: UBS | Probe

U.S. Probes More Than 150 UBS Customers

Wednesday, 19 Aug 2009 09:15 AM

WASHINGTON – The United States is "criminally investigating" more than 150 U.S. customers of Swiss banking giant UBS on suspicion they concealed income and assets to avoid US taxes, court documents said Tuesday.

"The United States is criminally investigating more than 150 Americans across the country who are believed to have concealed income and assets at UBS, in violation of United States law," the Justice Department said in filings before a federal court in Fort Lauderdale, Florida.

The investigation was made public in filings related to the sentencing of Bradley Birkenfeld, a UBS banker who in 2008 provided information to a US investigation into tax evasion by the Swiss bank.

The 150 UBS customers now under investigation had their identities revealed to US authorities by the Swiss bank back in February, as part of an initial deal under which the bank handed over a few account holder details and agreed to pay a 780 million dollar fine.

The US government said today "three such American clients have pleaded guilty to filing false tax returns that failed to disclose the existence of their UBS Switzerland bank account and report the income associated with said account on their United States individual tax return."

Among those who have admitted wrongdoing is John McCarthy, who opened a UBS account in the name of a Hong Kong-based company, and transferred a million dollars into it to avoid paying 200,000 dollars in taxes.

The US government earlier this year filed a lawsuit demanding that UBS turn over the identities of 52,000 of its American customers -- holders of accounts valued at 14.8 million dollars -- who were suspected of tax evasion.

The case is likely to be resolved out of court after the two sides announced August 12 that they had reached a settlement. A source close to the case said the deal would be signed Wednesday.

While no firm details have emerged about the agreement signed by UBS and the US government, the Swiss press has reported that the bank may escape with a fine and the handover of 5,000 of the 52,000 account holders names the United States first sought.

The tax evasion issue caused significant friction between the United States and Switzerland, threatening the latter's famed banking secrecy.

The Swiss government warned that if the United States pursued a court order forcing UBS to reveal all the account holder names it could provoke an international crisis.


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