Banking giant UBS has agreed to pay US$780 million and turn over once-secret Swiss banking records to settle allegations it conspired to defraud the US government of taxes owed by thousands of American clients.
As part of the deal struck in a federal court in Fort Lauderdale, Florida, UBS has made the unprecedented step of agreeing to turn over to the US government immediately account information for US customers of the bank’s cross-border business.
In doing so, US authorities have struck a big crack in Switzerland’s vaunted bank secrecy laws.
UBS will pay US$780 million in fines, penalties, interest and restitution for conspiring to create sham accounts to hide from the US government the assets of US clients.
The financial hit on UBS is more than double a penalty imposed by federal authorities just last month against Lloyds TSB Bank PLC, for helping its clients skirt US 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 said the bank was determined to abide by the terms of the deal with US 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,” Kurer said on Wednesday.
Approximately 17,000 American clients concealed their UBS accounts from the Internal Revenue Service (IRS), hiding assets of roughly US$20 billion in total, US officials said.
US officials said that when the 2000 acquisition of a US company brought UBS a host of new American clients, the bank set about to evade new reporting requirements for those clients. To do so, UBS executives helped US taxpayers open new accounts in the names of sham entities.
Prosecutors contend that UBS executives used encrypted software and other countersurveillance techniques to prevent anyone from detecting that they were actively marketing such Swiss bank secrecy, and tax evasion, to American taxpayers. The clients, in turn, filed false tax returns that omitted the income they earned in their Swiss accounts, the court papers show.
US officials said they had pulled aside a veil of secrecy that hid a corrupt international banking practice.
“This was not a mere compliance oversight, but rather a knowing crime motivated by greed and disrespect for the law,” said Alexander Acosta, US attorney for southern Florida.
IRS Commissioner Doug Shulman warned US taxpayers hiding money overseas that it was time to come clean with the agency.
“People who have hidden unreported income offshore need to get right with their government. They should come forward and take advantage of our voluntary disclosure process,” Shulman said.
Democratic Senator Carl Levin has estimated that abusive tax shelters and hidden offshore accounts cost the US government nearly US$100 billion a year in lost tax revenue.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft
Taiwan’s first drag queen to compete on the internationally acclaimed RuPaul’s Drag Race, Nymphia Wind (妮妃雅), was on Friday crowned the “Next Drag Superstar.” Dressed in a sparkling banana dress, Nymphia Wind swept onto the stage for the final, and stole the show. “Taiwan this is for you,” she said right after show host RuPaul announced her as the winner. “To those who feel like they don’t belong, just remember to live fearlessly and to live their truth,” she said on stage. One of the frontrunners for the past 15 episodes, the 28-year-old breezed through to the final after weeks of showcasing her unique