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Switzerland’s oldest bank to close after helping Americans dodge tax

Wegelin was fined $57.6 million for helping citizens hide money from tax authorities – and will shut down once it’s paid.

Image: andreas_fischler via Flickr

SWITZERLAND’S oldest bank is to shut down after accepting a fine for helping US citizens to avoid tax.

Wegelin, which has existed since 1741, admitted that it had allowed over 100 American citizens to keep their assets offshore and hidden from the Internal Revenue Service over for over a decade.

The admission of guilt, in a court in New York, makes it the first foreign bank to have admitted to tax evasion charges in the US.

Though the company’s fine is a relatively minor $57.8 million (€43.9 million), the bank said it would cease trading once the fine had been paid.

The majority of Wegelin’s customers and employees had already been transferred to another bank last year; it had only remained trading to process the handover of its remaining legitimate US customers.

The bank said in a statement that it had co-operated with the US inquiries “within the bounds allowed for by Swiss law” since learning that it was under investigation.

Prosecutors had claimed that the bank did not have branches outside Switzerland, but that it had accessed the US banking system through a correspondent account it held with a bank in Connecticut.

They argued that the bank had opened and serviced dozens of new accounts for US taxpayers – who were apparently looking for new services after UBS was hit with similar charges – and had told its account holders that details of their holdings would not be disclosed to American authorities.

It was claimed that Wegelin had opened the accounts in the names of sham corporations which had been established in jurisdictions such as Panama, and had corresponded with clients through private email addresses instead of sending them account statements by post.

Additional reporting by AP

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