US agency to scan UBS records for Wegelin tax dodgers

Written by Reuters | New York | Updated: Jan 30 2013, 09:02am hrs
A us federal judge has authorised the Internal Revenue Service (IRS) to seek records from UBS of US taxpayers suspected of hiding their income in accounts with Swiss bank Wegelin.

Wegelin, the oldest Swiss private bank, pleaded guilty in Manhattan federal court on January 3 to charges of helping wealthy Americans evade taxes through secret accounts, then said it would close down as a result.

US district judge William Pauley in Manhattan granted the IRS request to issue a John Doe summons which seeks information about possible tax fraud committed by individuals whose identities are not known on UBS for the names of taxpayers who may have hidden income at Wegelin and other Swiss banks.

A spokesman for UBS in Zurich said the bank would follow the courts ruling, which demands US records, and not Swiss ones. No UBS client data is affected, he said.

UBS ended its own US probe in 2009 by admitting it provided tax-evasion services to rich Americans, entering into a deferred-prosecution agreement, turning over 4,450 client names and paying a $780 million fine.

However, UBS was subsequently ensnared as a so-called correspondent bank for Wegelin when the government indicted that bank nearly a year ago. The government alleged Wegelin used a US correspondent account at UBS to handle funds for American clients, an industry practice for foreign banks.