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Fraud Case Breaches Venerable Swiss Secrecy

Nation's tradition of bank secrecy imperiled by UBS investigation

By Jason Farago,  Newser Staff

Posted Oct 1, 2008 10:50 AM CDT
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(Newser) – 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.

Swiss authorities are cooperating with the Justice Department in an investigation into tax fraud among American clients of UBS.
Swiss authorities are cooperating with the Justice Department in an investigation into tax fraud among American clients of UBS.   (AP Photo/Mark Lennihan, file)
Swiss authorities are cooperating with the Justice Department in an investigation into tax fraud among American clients of UBS.
Swiss authorities are cooperating with the Justice Department in an investigation into tax fraud among American clients of UBS.   (AP Photo/Keystone, Alessandro Della Bella, File)
Marcel Rohner, CEO of the Swiss bank UBS. Swiss authorities are cooperating with the Justice Department in an investigation into tax fraud among American clients of the bank.
Marcel Rohner, CEO of the Swiss bank UBS. Swiss authorities are cooperating with the Justice Department in an investigation into tax fraud among American clients of the bank.   (AP Photo/Keystone, Steffen Schmidt)
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UBS is cutting another 1,900 jobs
Times (UK)

An earlier report on the fight against bank secrecy
Der Spiegel

 
Department of Justice • Switzerland • UBS • tax evasion • tax fraud • bank scandal • Swiss bank • bank secrecy

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