(Bloomberg News) Switzerland's Wegelin & Co. said three bankers were charged with conspiring to help U.S. clients hide more than $1.2 billion from American tax authorities.
Michael Berlinka, Urs Frei and Roger Keller helped Americans open dozens of accounts and hide them from the Internal Revenue Service after a U.S. crackdown on offshore tax evasion led clients to flee bigger Swiss banks in 2008 and 2009, according to an indictment filed yesterday in federal court in Manhattan.
All three employees remain at the bank, spokeswoman Albena Bjorck said in an e-mailed statement today. Wegelin, the oldest Swiss private bank, no longer has U.S. clients, and it is negotiating with U.S. authorities, Bjorck said. The indictment doesn't name Wegelin, referring to "Swiss Bank A" and saying all three worked at its Zurich branch.
The indictment signals a broadening crackdown by U.S. prosecutors, who filed tax charges against more than three dozen U.S. clients of UBS AG and Credit Suisse Group AG, Switzerland's two biggest banks, and London-based HSBC Holdings Plc, Europe's biggest bank. They also have charged at least 24 bankers, advisers and attorneys, including seven Credit Suisse bankers.
"This is a further example of what the government has been saying all along -- that they are not stopping with UBS or Credit Suisse," said Bryan Skarlatos, a tax attorney with Kostelanetz & Fink LLP in New York. "The criminal grand jury investigations are continuing with respect to banks in Switzerland and other countries."
The indictment comes amid U.S.-Swiss talks to resolve a U.S. probe of offshore tax evasion. Officials are trying to conclude negotiations on a civil settlement with Swiss banks, as well as criminal probes of 11 of them, including Wegelin, which is based in St. Gallen.
U.S. prosecutors charged UBS in February 2009 with helping Americans hide assets from the Internal Revenue Service. UBS avoided prosecution by admitting it fostered tax evasion, paying $780 million and handing over data on 250 secret accounts. It later disclosed another 4,450 accounts, causing U.S. customers to seek new banks.
As those clients fled UBS and another large Swiss bank, Berlinka, Frei and Keller and "Managing Partner A" wooed them, according to the indictment. The bank, which is principally owned by eight managing partners, also solicited accounts through a third-party website, "SwissPrivateBank.com," prosecutors said.
The men told clients their undeclared accounts would stay hidden from the IRS because the bank "had a long tradition of bank secrecy, and, unlike UBS, did not have offices outside Switzerland," making it "less vulnerable to United States law enforcement pressure," according to the indictment.