UBS Pays $780 Million Fine and Agrees to Reveal Customer Identities
The U.S. Justice Department announced in February 2009 that the Swiss bank UBS had agreed to pay a large fine and promptly disclose the names of American customers with secret accounts. The department also released details on a criminal investigation that revealed the major bank's intent to conceal customer income from the Internal Revenue Service.
To penalize it for hiding accounts and to compensate the U.S. government for lost tax revenue, UBS was ordered to pay $780 million dollars in penalties and interest. As part of the prosecution agreement, the Swiss bank also indicated that it would stop supplying secret bank accounts to American customers.
With the approval of Swiss authorities, UBS agreed to furnish detailed information about its American customers with hidden accounts. The U.S. government had requested that it provide the names and account details of each customer. This would enable the IRS to demand unpaid taxes from UBS clients.
The Justice Department also revealed information obtained during a criminal investigation of the matter. It indicated that UBS staff assisted American clients in efforts to open secret bank accounts in Switzerland. The findings suggested that some executives at UBS were aware of these activities as well.
Investigators also maintained that UBS staff sought to conceal information about hidden Swiss accounts. Among other techniques, the staff encrypted data on their notebook computers. The investigation found that bankers from Switzerland visited the U.S. many thousands of times in recent years; the primary goal was to promote secret bank accounts.
UBS is the top commercial bank in Switzerland. In recent years, the U.S. government has stepped up efforts to expose secret bank accounts. Facing a charge of conspiracy, a former private banker at UBS plead guilty in 2008. Five months later, a court in Fort Lauderdale indicted a UBS executive and charged him with conspiracy.
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