U.S. District Judge William H. Pauley III signed an order in Manhattan federal court that authorized the IRS to serve a summons on UBS, the largest Swiss bank. The tax agency seeks records of Wegelin’s correspondent account at UBS, according to the Jan. 25 order announced yesterday.
Those records will allow U.S. authorities to determine who held assets at Wegelin and other Swiss institutions using the UBS account, according to U.S. Attorney Preet Bharara. Wegelin admitted on Jan. 3 that it helped U.S. taxpayers hide more than $1.2 billion in assets from the IRS.
“Today’s summons is the latest step in our efforts to identify and prosecute U.S. taxpayers who think they can evade their legal responsibility to pay taxes by secreting their money away in anonymous offshore accounts at Wegelin and other banks,” Bharara said in a statement.
Pauley gave permission to the IRS to serve a so-called John Doe summons on UBS. In a court petition, Assistant U.S. Attorney Natalie N. Kuehler said Wegelin held a correspondent account through a UBS office in Stamford, Connecticut.
Correspondent Account
UBS will fulfill its legal obligations in the U.S., the Zurich-based bank said today in a statement. The summons isn’t for data on UBS clients or for data from Switzerland, it said.
“Wegelin used the UBS correspondent account to provide offshore banking services to dozens of U.S. taxpayers, who the IRS believes may have failed to report the existence of their Swiss bank accounts to the IRS and the Department of Treasury,” Kuehler wrote in the Jan. 25 filing.
In an indictment last year, prosecutors said that more than 100 U.S. taxpayers conspired with Wegelin and Swiss bankers Michael Berlinka, Urs Frei and Roger Keller to hide income from the IRS. Those individuals, who live outside the U.S., were first indicted in January 2012 and haven’t appeared in court to answer the charges. The bank held more than $1.2 billion in assets not declared to the IRS, according to the indictment.
The U.S. said Wegelin and the three bankers wooed U.S. clients fleeing UBS. UBS avoided U.S. prosecution in 2009 by admitting it aided tax evasion, paying $780 million and handing over data on 250 accounts. It later disclosed information on about 4,450 more accounts.
By attracting ex-UBS clients, Wegelin opened new undeclared accounts for at least 70 U.S. taxpayers, according to the indictment. Most of those accounts were given an internal code of “BNQ,” indicating the accounts were undeclared.
Since 2009, the IRS has served John Doe summonses on UBS and HSBC Holdings Plc, Europe’s largest bank by market value.
Bloomberg
