Swiss bank Wegelin is "fugitive" in tax fraud case | G7Finance.com ...

Fri Feb 10, 2012 4:18pm EST

* Oldest Swiss private bank deemed a fugitive

* Wegelin & Co charged with helping Americans evade taxes

* Three bankers were also charged with conspiracy

* Judge urges use of diplomatic channels to find Wegelin

By Jonathan Stempel

Feb 10 (Reuters) ? Wegelin & Co, the oldest Swiss
private bank, was declared a fugitive after failing to show up
in a U.S. court to answer a criminal charge that it conspired to
help wealthy Americans evade taxes.

At a hearing in Manhattan federal court, U.S. District Judge
Jed Rakoff on Friday suggested that U.S. prosecutors enlist the
help of diplomatic authorities, including perhaps the State
Department, to advance the case.

The indictment of Wegelin, which was founded in 1741, was
the first in which the United States accused a foreign bank,
rather than individuals, of helping Americans commit tax fraud.

Wegelin was accused of helping clients hide more than $1.2
billion in offshore bank accounts.

?Occasionally in these situations, progress is made through
diplomatic channels,? Rakoff told Assistant U.S. Attorney Daniel
Levy at the hearing. ?Unlike an individual, arresting a company
is somewhat difficult, other than in science fiction.?

Rakoff spoke after Levy said ?we have no proposal? for how
to get Wegelin to formally answer the charge.

Prosecutors unveiled the charge on Feb. 2, one month after
bringing conspiracy charges against three bankers in its Zurich
branch: Michael Berlinka, Urs Frei and Roger Keller.

According to prosecutors, more than 100 U.S. taxpayers
conspired with the defendants and other unnamed co-conspirators
between 2002 and 2011 to hide money from the Internal Revenue
Service.

The government also seized more than $16 million from an
account that Wegelin held in Stamford, Connecticut with the
Swiss bank UBS AG.

Wegelin has no branches outside Switzerland, and followed
the common industry practice of using correspondent banking
services to handle money for U.S. clients.

In 2009, UBS paid $780 million and entered a deferred
prosecution agreement with the Justice Department to resolve
allegations that it helped Americans evade taxes.

Wegelin effectively broke up last month by selling its
non-U.S. operations to the Swiss bank Raiffeisen.

It also moved most of its workers, clients and 21 billion
Swiss francs (US$22.9 billion) of assets to Notenstein
Privatbank, set up specifically for the break-up.

No further proceedings are scheduled in the Wegelin criminal
case.

The case is U.S. v. Wegelin & Co et al, U.S. District Court,
Southern District of New York, No. 12-cr-00002.

Source: http://g7finance.com/g7finance-news/swiss-bank-wegelin-is-fugitive-in-tax-fraud-case/

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