UBS in tax evasion probe
Troubled Swiss investment bank faces a US investigation into wealthy clients’ offshore accounts and tax evasion
LONDON – UBS is under investigation by the US Department of Justice (DoJ) over allegations that it created offshore accounts that allowed clients to avoid taxes. The probe comes after a former UBS banker, Bradley Birkenfeld, admitted last month to helping wealthy US customers evade $7 million in tax.
The DoJ is seeking the southern Florida Federal District Court’s approval for the Internal Revenue Service (IRS) to issue a summons requiring UBS to reveal key information. The Swiss investment bank is co-operating fully with the authorities.
“UBS takes this matter very seriously and is working diligently with both Swiss and US government authorities, consistent with Swiss law and the legal frameworks for intergovernmental co-operation and assistance,” says UBS in a statement.
UBS has been beset by heavy subprime losses in the past year, including a loss of $11 billion for the first quarter of 2008 followed by the announcement of 5,500 job losses.
Swiss officials held talks with US counterparts last week over the allegations. Birkenfeld has claimed he hid over $200 million in overseas accounts, robbing the IRS of over $7 million in revenue.
Birkenfeld has said over $20 billion remains in undeclared Swiss accounts controlled by US residents, which the DoJ is now very interested in uncovering. It has been reported that up to 20,000 US citizens could be involved.
In a statement the IRS says its investigation aimed to “detect wealthy individuals who don't pay their taxes as well as provide details about how advisers facilitate this abuse”.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Can US perpetual futures solve their identity crisis?
Market could fall under four different regulatory categories, with sharply diverging outcomes
Banks want AML data upgrade to complement US regulatory reform
FinCEN’s proposed overhaul sparks debate on whether it will lead to smarter or weaker supervision
Industry pushes EU exchanges to solve equity post-trade frictions
Deutsche Bank, Goldman Sachs and JP Morgan join calls for mandatory cash CCP interoperability
Regulatory clarity urged for CME’s single-stock futures
SEC short selling and market access rules may hamper clearing and broker participation
Imminent US shake-up of LCR slated to include discount window
Adding Fed liquidity facility to bank regulation may help overcome stigma, raise lending capacity
French regulator wants permanent changes to EU’s output floor
Push for capital relief faces resistance from supervisors in Finland and the Netherlands
Council plans take Aquis, BME out of Esma oversight
German push to exempt Deutsche Börse catches three others, according to sources
Why watering down resolution plans is a bad idea
Bank failures are inevitable; banking crises are not