UBS under formal investigation in France over tax evasion

BBC News, 7 June 2013

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UBS and its French branch are suspected of helping
rich clients set up illegal accounts in Switzerland

French authorities are formally investigating UBS for allegedly helping wealthy clients open undeclared bank accounts in Switzerland.

The Swiss bank is suspected of "complicity in illegal sales practices", an official at the Paris prosecutor's office told the BBC.

It also allegedly set up a shadow accounting system that masked transfers between French and Swiss bank accounts.

UBS said it was cooperating with authorities.

Under French law being placed under official investigation means there is "serious or consistent" evidence to implicate a suspect in a crime. But it does not necessarily lead to a trial, the official said.

The latest move follows action taken against the bank's French unit last week which was also formally placed under investigation.

Whistle-blower

The allegations came to light after former UBS employees blew the whistle on the alleged practices.

The former head of UBS France, Patrick de Fayet, and two other local branch executives have already been placed under investigation.

UBS said: "We will continue working with the authorities in France within the applicable legal framework to arrive at a resolution to this matter."

In a separate statement in French, it said: "The tribunal's decision widens the probe. UBS will continue to cooperate with the French authorities. UBS will not allow any move aimed at helping clients to avoid their fiscal duties."

The alleged offences are believed to have taken place between 2002-2007 and involve individuals and companies.

Anonymous letter

The magistrates investigating the affair have sent a list containing the names of 353 people suspected of having held a Swiss account to Swiss authorities and have requested details, the official at the prosecutor's office told the BBC.

An anonymous letter had been sent to the regulatory arm of the French central bank suggesting that parallel accounts were opened in Switzerland but that were not declared in France, the AFP news agency reported.

UBS was separately also given the status of "supervised witness" on two other allegations related to money laundering and tax evasion, the prosecutor's office said.

Supervised witness means that a person must be accompanied by his or her lawyer if questioned further in the investigation.

The latest investigation came two months after former French budget minister Jerome Cahuzac resigned after admitting he had squirreled away savings in an undeclared Swiss bank account. His ministry was responsible for tackling tax evasion.

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