U.S. to Subpoena UBS for Wealthy Client Names

NEW YORK -- U.S. prosecutors are expected to approach UBS AG with a subpoena for the names of rich American clients who may have used the Swiss bank's services to skirt income taxes, The Wall Street Journal said on Thursday, citing lawyers and others involved in the case.

The subpoena would follow the unsealing of a grand jury indictment on Tuesday in Florida federal court, of former UBS private banker Bradley Birkenfeld and Liechtenstein businessman Mario Staggl, the report said.

Officials of UBS and the Internal Revenue Service could not be reached immediately for comment from Reuters.

In 2001, UBS agreed to provide U.S. tax officials with information on any customers receiving taxable U.S. income, a move seen at the time as a big step toward ending the secrecy that has helped make Switzerland a center for private banking. Under that pact, UBS agreed that its customers, for example, would fill out an IRS form that details ownership of foreign bank accounts, The Journal reported.

According to the indictment, the two men created fictitious trusts and bogus corporations to conceal the ownership and control of offshore assets. They also advised clients to destroy bank records and helped them file false tax returns, the indictment said, The New York Times reported.

The two men and others made several trips to the United States to pitch tax plans that were intended to conceal American bank clients’ ownership of accounts in a Swiss bank, the indictment said, The Times.

The plans enabled UBS to avoid its obligations to disclose certain income information to the I.R.S., the indictment said, while also evading certain American tax requirements. The cornerstone to the defendants’ pitch was that Swiss and Liechtenstein bank secrecy was impenetrable, the indictment said, according to The Times.

UBS declined to comment on the charges, The Times reported.

-- NYSSCPA.org News Staff

Posted on 5/15/08