Switzerland’s oldest private bank, Wegelin, has pleaded guilty to helping wealthy United States taxpayers hide at least $1.2 billion (SFr1.1 billion) hidden in offshore accounts. The bank was indicted last February on charges of conspiracy and fraud.
Otto Bruderer, an official at the St Gallen-based bank, appeared in Manhattan federal court on Thursday to enter a plea on the company’s behalf to a single count of conspiracy.
“From 2002 to 2010, Wegelin conspired with certain US taxpayers to evade US taxes,” Bruderer told the court.
Under a proposed plea agreement, the bank will pay $20 million in restitution to the US authorities, forfeit $15.8 million, representing fees on undeclared accounts, and pay a fine of $29.4 million.
The deal requires the approval of US district judge Jed Rafkoff. Sentencing is set for March 4.
Wegelin said it had set aside money to pay the fine, restitution and forfeiture.
“Once the matter is finally concluded, Wegelin will cease to operate as a bank,” a statement said.
UBS clients
Prosecutors said that from 2002 to 2011, more than 100 US taxpayers conspired with Wegelin and at least three named bankers. The indictment mentions accounts for at least 70 US taxpayers.
The defendants are accused of wooing US clients fleeing Switzerland’s largest bank UBS which avoided prosecution in 2009 by admitting it aided tax evasion, paying $780 million and handing over data on about 250 accounts. It later disclosed information on about 4,450 accounts.
Wegelin was the first Swiss bank charged in a US crackdown on offshore firms suspected of helping Americans evade taxes.
In the past Bank Wegelin repeatedly failed to appear for a hearing in a New York court. The bank argued that the summons had not been delivered correctly.
Crackdown
In a separate civil law suit last year, another district judge entered a default judgment against the bank, ordering it to forfeit about $16.2 million held in its US accounts.
At least 13 banks in Switzerland are being targeted by US tax investigators in a row over American client’s undeclared assets.
Wegelin, which was founded in 1741, split and sold its non-US operations to retail bank Raiffeisen in 2011 in a bid to protect its assets from the charges.
Ratification of a revised tax deal between Switzerland and the US has been on hold amid opposition by a Republican senator.