Swiss authorities are cooperating with an American investigation into a tax fraud scandal, dealing a major blow to the nation's tradition of banking secrecy. Swiss bank UBS is alleged to have helped up to 20,000 American clients evade taxes by stashing their fortunes—collectively worth $20 billion—in undeclared accounts. Now, after initial resistance, Switzerland has agreed to hand over confidential data to the Justice Department, reports the New York Times.
Switzerland's strict banking secrecy laws, dating to the Middle Ages, outlaw any disclosure of clients' names or data unless they are suspected of a serious crime—and tax evasion doesn't qualify. But under pressure from the DoJ, the Swiss now accept that many clients have gone further than evasion and may have committed fraud. The DoJ hopes to prove that suspects hid their assets in accounts registered to bogus shell companies.