U.S. prosecutors have opened a new investigation into whether UBS AG (UBS) helped Americans avoid paying taxes via investments that were banned in the country. The government is looking at whether the Swiss bank used bearer securities, which may be used as if they were cash. These securities were phased out of the financial system in the U.S. more than thirty years ago because they can be used in money laundering and tax evasion.
According to the Wall Street Journal, not only are prosecutors in the U.S. attorney’s office in Brooklyn looking at evidence of whether bank employees played a role in allowing securities fraud and tax evasion to happen, but also they are seeking proof that there may have been a criminal cover up internally. A whistleblower is involved in this latest probe.
In 2009, UBS paid $780 million to resolve a tax evasion investigation by the Department of Justice. The Swiss bank admitted that it encouraged this type of conduct. As part of the settlement it disclosed the identities of 250 American banking clients. It settled another U.S. lawsuit in which it revealed the names of 4,450 U.S clients with UBS accounts.
Providing Swiss accounts to American clients has proven profitable for UBS and other internationally-based banks. At one point this part of the business made UBS up to $200 million yearly.
Last year, Credit Suisse (S) paid $2.6 billion to the Justice Department, the Federal Reserve, and the New York State Department of Financial Services to settle allegations over its role in helping Americans evade paying taxes. It also pleaded guilty to criminal charges. The Swiss bank settled related claims by the Securities and Exchange Commission for $196 million.
UBS Said to Be Under New Tax-Evasion Probe in U.S., Bloomberg, February 4, 2015
Credit Suisse pleads guilty in tax evasion case, CNN, May 19, 2014
More Blog Posts:
UBS Settles SEC Dark Pool Case for $14M, Stockbroker Fraud Blog, January 16, 2015
Beneficiaries of Puerto Rico Trust File Securities Fraud Lawsuit Seeking Over $4.5M From UBS Financial Services, Stockbroker Fraud Blog, January 5, 2015
European Commission Takes Action Against JPMorgan, UBS, RBS & Credit Swiss for Cartel Conduct, Institutional Investor Securities Blog, October 27, 2014