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
FRTB models find salvation in US Basel III proposal
Changes to P&L attribution test and NMRFs make IMA viable for US banks, risk managers say
US blows the floors off Basel III
Barr criticises “downward deviations” in US rule; Bowman rejects “blind adherence” to global standards
Basel III endgame – a timeline
A review of Risk.net’s coverage of the US implementation saga
Leaked EU plans offer extra temporary relief for FRTB models
Risk factors would need only two observations to be modellable. Do changes foreshadow US Basel III?
Iosco chief talks cyber, AI and clearing
Buenaventura discusses Iosco’s role in aiding market resilience and cross-border co-operation
US regulators bid to save FRTB IMA, but it’s no small task
Even if industry wish-list is granted, a 2028 start date might be too soon for model adoption
Hopes rise for cross-product netting under SA-CCR
Banks want rule change in Basel III endgame to lower capital costs of clearing UST repos
Long way round: EU banks lament credit spread saga
EBA ditches some of banks’ preferred qualitative reasonings – and shortcuts – for CSRBB exclusion