UBS to pay $780M, open secret Swiss bank records

[chicago]

Wednesday February 18, 8:14 pm ET
By Devlin Barrett, Associated Press Writer

Banking giant UBS admits to helping defraud IRS, will pay $780M, open secret Swiss records

WASHINGTON (AP) -- Banking giant UBS has agreed to pay $780 million and turn over once-secret Swiss banking records to settle allegations it conspired to defraud the U.S. government of taxes owed by thousands of American clients.

As part of the deal struck in federal court in Fort Lauderdale, Fla., UBS has made the unprecedented step of agreeing to immediately turn over to the U.S. government account information for U.S. customers of the bank's cross-border business.

In doing so, federal authorities have struck a big crack in Switzerland's vaunted bank secrecy laws.

UBS will pay $780 million in fines, penalties, interest and restitution for conspiring to create sham accounts to hide the assets of U.S. clients from the U.S. government.

The financial hit on UBS is more than double the penalty imposed by federal authorities just last month on a different international bank, Lloyds TSB Bank PLC, for helping its clients skirt U.S. sanctions against Sudan, Iran and Libya.

"We accept full responsibility for these improper activities," Peter Kurer, chairman of Swiss-based UBS AG, said in a statement. He added that the bank was determined to abide by the terms of the deal with U.S. criminal and securities officials.

"Client confidentiality, to which UBS remains committed, was never designed to protect fraudulent acts or the identity of those clients, who, with the active assistance of bank personnel, misused the confidentiality protections," he said Wednesday.

About 17,000 American clients concealed their UBS accounts from the IRS, hiding total assets of roughly $20 billion, U.S. officials said.

UBS to pay $780M, open secret Swiss bank records: Financial News - Yahoo! Finance