- The Washington Times - Thursday, February 19, 2009

The world became smaller Wednesday for U.S. citizens seeking to hide money in Swiss bank accounts.

Banking giant UBS AG, Switzerland’s largest bank, agreed to pay $780 million to settle accusations that it helped U.S. customers hide money from the IRS. And in what the Justice Department described as an “unprecedented move,” UBS agreed to provide the names of up to 20,000 Americans who sought to avoid paying income taxes by keeping secret accounts.

According to court records, those U.S. customers, who had assets totaling about $20 billion, did not pay taxes on income earned on their UBS accounts.

“The veil of secrecy has been pulled aside and we will continue to aggressively pursue those who shirk their federal tax obligations or assist others in doing so,” said John A. DiCicco, acting assistant attorney general for the department’s tax division.

The agreement also requires the bank to stop doing business with Americans with undeclared accounts.

Prosecutors say UBS used outside lawyers and accountants to help their American clients commit tax evasion. The bank also sent letters to clients reminding them that UBS has successfully concealed account information from U.S. authorities since at least 1939.

According to court records, UBS employees received special training to avoid the notice of authorities when traveling to the U.S. on business.

In 2004, the Justice Department said, 32 bankers came to the U.S. to meet with about 3,800 clients. The bankers used encrypted laptops and counter-surveillance techniques to elude authorities.

The agreement reached Wednesday in U.S. District Court in Florida follows a lengthy investigation that has already seen one UBS banker plead guilty to criminal charges and a high-ranking executive go on the run.

Last June, UBS private banker Bradley Birkenfeld pleaded guilty to helping a client hide $200 million in assets from U.S. authorities. Five months later, Raoul Weil, a UBS executive was indicted on charges that he helped American clients hide $20 billion in assets from U.S. tax authorities. Mr. Weil, who was the head the bank’s largest unit, wealth management, was declared a fugitive last month after avoiding capture.

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