Friday, June 20, 2008
UBS AG To Out American Clients
Swiss banking giant UBS AG is said to have agreed to disclose to U.S. federal prosecutors some of the names out of its 20,000 American clients - Those who may have broken U.S. tax regulations by using off-shore shell companies as fronts to hoard assets in overseas accounts without disclosure.
This apparent cave-in by UBS will no doubt not only affect its existing clientele and business in the United States, but also possibly have long-term implications on its wealth management unit and the way it operates. UBS manages about $710 billion for American clients. Details from CNNMoney and background information on the whole matter here and here.
"A fraction" of those customers are being investigated for possibly breaching the rules by using offshore companies to hold U.S. assets without filling in the supplementary form, known as W-9, UBS spokesman Serge Steiner said. UBS said in a statement that it is working with Swiss and U.S. authorities to "promptly provide information concerning instances in which the establishment and operation of such offshore entities and their UBS securities accounts appears to have been part of a scheme to defraud U.S. tax authorities."
Meanwhile, ex-UBS banker Bradley C. Birkenfeld, formerly the Geneva based director of wealthy American clients with undeclared offshore accounts with UBS from 2002 to 2006, pleaded in guilty to a charge of helping American billionaire, Igor Olenicoff, evade federal income taxes on $200 million in assets hidden in Liechtenstein and Switzerland.
Bloomberg report indicates that Birkenfeld has already implicated other UBS bankers and wealthy clients in his plea. He also said that he engaged in a a variety of schemes to help wealthy U.S. clients hide about $20 billion in assets. In one case, Birkenfeld even agreed to buy diamonds for a U.S. client using Swiss funds and "smuggled the diamonds into the United States in a toothpaste tube," Birkenfeld said. He and his colleagues helped wealthy Americans hide money by telling them to put cash and jewelry in Swiss safety deposit boxes, buy artwork and jewels using offshore accounts, and set up accounts in the names of others, he said yesterday in federal court in Ft. Lauderdale, Florida.
Also, a Swiss government delegation is set to meet with federal authorities in the U.S. to discuss the UBS case. Details from Reuters report. The Swiss federal office of justice said on Friday that it was responding to a U.S. request for Swiss judicial assistance received on June 11. "I can confirm that a Swiss delegation went to Washington to discuss questions in the context of the U.S. request. The meeting takes places today," spokesman Folco Galli told Reuters. The delegation is made up of authorities from the Swiss federal office of justice as well as the federal tax administration, part of the finance ministry, he said.
This apparent cave-in by UBS will no doubt not only affect its existing clientele and business in the United States, but also possibly have long-term implications on its wealth management unit and the way it operates. UBS manages about $710 billion for American clients. Details from CNNMoney and background information on the whole matter here and here.
"A fraction" of those customers are being investigated for possibly breaching the rules by using offshore companies to hold U.S. assets without filling in the supplementary form, known as W-9, UBS spokesman Serge Steiner said. UBS said in a statement that it is working with Swiss and U.S. authorities to "promptly provide information concerning instances in which the establishment and operation of such offshore entities and their UBS securities accounts appears to have been part of a scheme to defraud U.S. tax authorities."
Meanwhile, ex-UBS banker Bradley C. Birkenfeld, formerly the Geneva based director of wealthy American clients with undeclared offshore accounts with UBS from 2002 to 2006, pleaded in guilty to a charge of helping American billionaire, Igor Olenicoff, evade federal income taxes on $200 million in assets hidden in Liechtenstein and Switzerland.
Bloomberg report indicates that Birkenfeld has already implicated other UBS bankers and wealthy clients in his plea. He also said that he engaged in a a variety of schemes to help wealthy U.S. clients hide about $20 billion in assets. In one case, Birkenfeld even agreed to buy diamonds for a U.S. client using Swiss funds and "smuggled the diamonds into the United States in a toothpaste tube," Birkenfeld said. He and his colleagues helped wealthy Americans hide money by telling them to put cash and jewelry in Swiss safety deposit boxes, buy artwork and jewels using offshore accounts, and set up accounts in the names of others, he said yesterday in federal court in Ft. Lauderdale, Florida.
Also, a Swiss government delegation is set to meet with federal authorities in the U.S. to discuss the UBS case. Details from Reuters report. The Swiss federal office of justice said on Friday that it was responding to a U.S. request for Swiss judicial assistance received on June 11. "I can confirm that a Swiss delegation went to Washington to discuss questions in the context of the U.S. request. The meeting takes places today," spokesman Folco Galli told Reuters. The delegation is made up of authorities from the Swiss federal office of justice as well as the federal tax administration, part of the finance ministry, he said.
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