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article imageGroup of Rich Americans Sue UBS to Keep Names Secret in Tax Case

By Chris V. Thangham     Feb 25, 2009 in Crime
A group of wealthy clients are suing UBS to block the disclosure of their identities to the Internal Revenue Service in the midst of a tax-evasion investigation. The lawsuit claims it violates Swiss bank secrecy laws.
The suit was filed by Andreas Rued, a lawyer in Zurich on behalf of dozen rich clients living in the U.S. to prevent the UBS bank from disclosing their names.
The lawsuit accuses UBS and Switzerland’s financial regulator, the Swiss Financial Market Supervisory Authority or Finm of violating Swiss bank secrecy laws and of conducting what Swiss law considers illegal activities with foreign authorities.
In Switzerland, banks cannot reveal client names under Swiss laws; it is a criminal offense and anyone found exposing the client’s name will be prosecuted. Also, tax evasion is not a crime in Switzerland. Since UBS does banking in the U.S. also they are forced to comply with the federal authorities.
UBS announced (See Paul Wallis article here) on Tuesday that they will turn over to the federal authorities the names of 250 wealth Americans suspected of using offshore accounts and avoiding taxes at home.
UBS also earlier reached a $780 million deferred-prosecution agreement to settle accusations that it provided stealth off-shore private banking services to wealth Americans to help them avoid taxes at home.
The Justice Department is not finished yet with UBS. They are still trying to get more names from the UBS bank. More than 52,000 American clients are suspected of avoiding federal taxes by maintaining secret off-shore accounts with UBS.
UBS, despite financial woes, still remains the largest private bank in the world. Switzerland also holds the record for being the world’s largest offshore tax haven with more than trillions of dollars in assets.
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