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Who has the better trump cards? UBS or the FBI?
52,000 Tax Cheats with UBS Accounts
WASHINGTON – Federal authorities have filed a lawsuit against Swiss-based bank UBS AG seeking the identities of tens of thousands of U.S. customers.
The suit filed in Miami Thursday seeks to force the firm to turn over information on as many as 52,000 U.S. customers who hid their accounts from the U.S. government in violation of tax laws.
The company said it will fight in court to keep the names private, arguing Swiss bank secrecy laws shield those customers.
The lawsuit comes a day after the Justice Department struck a deal with UBS to get access to some of its customers who used Swiss bank secrecy law to hide billions of dollars in assets.
According to the government's lawsuit, the accounts in question held about $14.8 billion in assets in the past decade.
As part of its deal with prosecutors Wednesday, the bank agreed to pay $780 million in fines and penalties.
After the settlement of the criminal case was announced, the bank's chairman, Peter Kurer, said in a statement the firm accepted "full responsibility" for helping its U.S. clients hide assets from the IRS.
But that does not mean the bank is about to fork over information on thousands of accounts.
"This shows the big fight is yet to come," said George Clarke, a tax attorney based in Washington who is not involved in the UBS case.
A federal judge will now decide whether the U.S. courts can force a bank to violate Swiss bank secrecy laws and provide the account information.
According to U.S. officials, an acquisition in 2000 of a U.S. company brought UBS a host of new American clients. The bank then set about to evade new reporting requirements for those clients. To do so, UBS executives helped U.S. taxpayers open new accounts in the names of sham entities.
Prosecutors contend that UBS executives used encrypted software and other counter-surveillance 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, according to the court papers.
The suit filed in Miami Thursday seeks to force the firm to turn over information on as many as 52,000 U.S. customers who hid their accounts from the U.S. government in violation of tax laws.
The company said it will fight in court to keep the names private, arguing Swiss bank secrecy laws shield those customers.
The lawsuit comes a day after the Justice Department struck a deal with UBS to get access to some of its customers who used Swiss bank secrecy law to hide billions of dollars in assets.
According to the government's lawsuit, the accounts in question held about $14.8 billion in assets in the past decade.
As part of its deal with prosecutors Wednesday, the bank agreed to pay $780 million in fines and penalties.
After the settlement of the criminal case was announced, the bank's chairman, Peter Kurer, said in a statement the firm accepted "full responsibility" for helping its U.S. clients hide assets from the IRS.
But that does not mean the bank is about to fork over information on thousands of accounts.
"This shows the big fight is yet to come," said George Clarke, a tax attorney based in Washington who is not involved in the UBS case.
A federal judge will now decide whether the U.S. courts can force a bank to violate Swiss bank secrecy laws and provide the account information.
According to U.S. officials, an acquisition in 2000 of a U.S. company brought UBS a host of new American clients. The bank then set about to evade new reporting requirements for those clients. To do so, UBS executives helped U.S. taxpayers open new accounts in the names of sham entities.
Prosecutors contend that UBS executives used encrypted software and other counter-surveillance 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, according to the court papers.
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