US charges Swiss bank with helping hide $1.2B

U.S. prosecutors filed criminal charges against Switzerland's oldest bank on Thursday, alleging it helped wealthy Americans hide more than $1.2 billion in secret accounts abroad, the latest move in a U.S. crackdown on taxpayer assets hidden overseas.

The charges against Swiss private bank Wegelin & Co., founded in 1741, mark the first time an overseas bank has been indicted by U.S. authorities for helping U.S. taxpayers hide assets offshore.

U.S. authorities said they also seized on Thursday more than $16 million from a so-called correspondent bank account Wegelin has with UBS AG in Stamford, Conn.

"As alleged, Wegelin Bank aided and abetted U.S. taxpayers who were in flagrant violation of the tax code," said Preet Bharara, the U.S. attorney in Manhattan. "And they were undeterred by the crystal-clear warning they got when they learned that UBS was under investigation for the identical practices."

Richard Strassberg, a lawyer for Wegelin, declined to comment.

The indictment follows criminal charges last month against three Wegelin bankers who allegedly helped U.S. taxpayers and others hide the existence of Swiss bank accounts from U.S. tax authorities between 2002 and 2011.

Prosecutors alleged in early January that the trio opened and serviced dozens of undeclared accounts in 2008 and in 2009 in an effort to capture business lost by UBS and another Swiss bank after news broke that the U.S. was investigating UBS over undeclared accounts, prosecutors said. UBS and the other bank have since stopped servicing undeclared Swiss accounts.

Wegelin split and sold its non-U.S. operations to retail bank Raiffeisen late last month in a bid to protect its assets from charges it had helped U.S. clients avoid paying taxes.

In 2009, UBS admitted to conspiring to defraud the U.S. government of billions of dollars in taxes by helping wealthy Americans hide taxes. As part of an agreement to avoid criminal charges, the Swiss bank turned over the names of 4,000 U.S. account holders and paid a $780 million fine.