February 20, 2009
UBS - Deferred Prosecution and Ramifications
Deferred prosecution agreements can have ramifications to many. A DOJ press release states that "UBS AG, Switzerland’s largest bank, has entered into a deferred prosecution agreement on charges of conspiring to defraud the United States by impeding the Internal Revenue Service (IRS), the Justice Department..." The press release further states:
"As part of the deferred prosecution agreement and in an unprecedented move, UBS, based on an order by the Swiss Financial Markets Supervisory Authority (FINMA), has agreed to immediately provide the United States government with the identities of, and account information for, certain United States customers of UBS’s cross-border business. Under the deferred prosecution agreement, UBS has also agreed to expeditiously exit the business of providing banking services to United States clients with undeclared accounts. As part of the deferred prosecution agreement, UBS has further agreed to pay $780 million in fines, penalties, interest and restitution..."
Deferred prosecution agreements can provide information to the government to proceed against individuals. It has been controversial when the agreement waived attorney client privilege, allowing the government in some cases to secure evidence against individual employees in a corporation. But this deferred prosecution could have ramifications to customers. The issue being whether their tax liabilities were properly paid.
A more recent DOJ Press Release tells more. See DOJ Press Release, United States Asks Court to Enforce Summons for UBS Swiss Bank Account Records. Here the release states that " [t]he government filed a lawsuit ... in Miami against Swiss bank UBS AG." "The lawsuit asks the court to order the international bank to disclose to the Internal Revenue Service (IRS) the identities of the bank’s U.S. customers with secret Swiss accounts. According to the lawsuit, as many as 52,000 U.S. customers hid their UBS accounts from the government in violation of the tax laws."
It sounds like some white collar and tax attorneys will be busy in the next few months.
(esp)(blogging from Louisville, Kentucky)
Addendum - Lynnley Browning, NYTimes, UBS Pressed for 52,000 Names in 2nd Inquiry
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