UBS, U.S. settle tax evasion case

[Chicopee John]

Who can possibly be against this...........................

 

 

 

 

August 12, 2009 10:10 AM ET

 

(Reuters) - Swiss bank UBS AG and the U.S. government have agreed to settle a long-running dispute over the disclosure of names of wealthy American clients suspected of tax evasion, a U.S. government lawyer said on Wednesday.

 

The settlement is expected to involve the disclosure to U.S. authorities of thousands of names of people suspected of using offshore accounts to conceal assets and evade taxes.

 

Washington's case against UBS, the world's second-largest wealth manager, had strained relations between the United States and Switzerland because it challenged the latter's jealously guarded bank secrecy laws.

 

The case therefore has big implications not just for Switzerland, whose private banks manage around $2 trillion of foreign wealth, but for the entire offshore banking industry.

 

At a roughly three-minute hearing before U.S. District Judge Alan Gold in Miami, U.S. Department of Justice tax lawyer Stuart Gibson said the government would drop the case against UBS once a final settlement was in place.

 

"The parties have initialed agreements," Gibson said. "It will take a little time for the agreements to be signed in final form."

 

The U.S. government and UBS had reached a settlement in principle on July 31. Subsequent talks focused on how to transfer client data to Washington while respecting Swiss bank secrecy laws.

 

U.S. authorities had been seeking the names of 52,000 wealthy American clients suspected of trying to evade taxes.

 

The authorities believe many of the clients either inherited substantial wealth and have European roots, are frequent business travelers who receive offshore compensation via Swiss accounts, or intended their accounts from the start as a means to avoid U.S. taxes.

 

But UBS, backed by the Swiss government, held onto the data, calling the U.S. demand a fishing expedition that would breach Swiss laws and bilateral tax agreements.

 

In February, UBS had agreed to pay $780 million to settle criminal charges it had faced in a similar tax dispute with the U.S. government.

 

It agreed to hand over data related to about 250 U.S. clients who held secret accounts, and promised to close its offshore business to U.S. clients.

 

Swiss bank secrecy rules have eroded in recent years, and in March the government made concessions to abandon the distinction between tax fraud and tax evasion when dealing with foreign authorities.

 

UBS shares were up 1 percent at 16.01 Swiss francs in afternoon trading in Switzerland. In the United States, they were up 1 percent at $14.87 in morning trading.

 

(Reporting by Pascal Fletcher, Jim Loney and Jane Sutton in Miami; Writing by Jonathan Stempel in New York; Editing by Pascal Fletcher and Ted Kerr)

 

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[Kosar_For_President]

Shit, I better pull my money out.