BBC News, 4
January 2013
Related
Stories
Wegelin admitted that its actions had been "wrong" |
Wegelin,
which was established in 1741, has also agreed to pay $57.8m (£36m; 44m euros)
in fines to US authorities.
It said
that once this was completed, it "will cease to operate as a bank".
The bank
had admitted to allowing more than 100 American citizens to hide $1.2bn from
the Internal Revenue Service for almost 10 years.
Wegelin,
based in the small Swiss town of St Gallen, started in business 35 years before
the US declaration of independence.
It becomes
the first foreign bank to plead guilty to tax evasion charges in the US.
Other Swiss
banks have in recent years moved to prevent US citizens from opening offshore
accounts.
US Attorney
Preet Bharara said: "The bank wilfully and aggressively jumped in to fill
a void that was left when other Swiss banks abandoned the practice due to
pressure from US law enforcement."
He added
that it was a "watershed moment in our efforts to hold to account both the
individuals and the banks - wherever they may be in the world - who are
engaging in unlawful conduct that deprives the US Treasury of billions of
dollars of tax revenue".
Otto
Bruderer, a managing partner at the bank, said it was aware that its previous
conduct had been "wrong".
'Aggressively
pursuing'
After Wegelin
was first indicted by US authorities in February last year, it was declared a
fugitive from justice when its executives failed to appear in a US court.
The bank
had vowed to fight the charges, claiming that because it only had branches in
Switzerland, it was bound only by its home country's relaxed banking laws.
Jeffrey
Neiman, a former US federal prosecutor who was involved in a previous
investigation into Swiss banks, said: "It is unclear whether the bank was
required to turn over American client names who held secret Swiss bank
accounts.
"What
is clear is that the Justice Department is aggressively pursuing foreign banks
who have helped Americans commit overseas tax evasion."
It remains
to be seen whether US authorities will continue with, or drop, parallel charges
against three Wegelin bankers, Michael Berlinka, Urs Frei and Roger Keller.
The Wegelin
case comes four years after a far larger Swiss bank, UBS, agreed to pay a $780m
fine to US authorities related to tax evasion charges. UBS also agreed to
reveal the details of US account holders.
However,
UBS neither pleaded nor was found guilty. Instead it and US prosecutors came to
what is called a deferred prosecution agreement, with the fine being paid in
exchange for the charges being dropped.
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