The oldest Swiss private bank, Wegelin, was indicted by the United States Justice Department on Thursday on charges that it enabled wealthy Americans to escape at least $1.2 billion in taxes in hidden offshore bank accounts. This is the first time an overseas bank has been indicted for enabling fraud by U.S. taxpayers in the United States.
Wegelin does not have branches outside of Switzerland, which caused it to use correspondent banking services, also a standard industry practice, to handle money for clients based in the U.S. The United States seized more than $16 million from Wegelin’s corresponding bank, the Swiss giant UBS AG, located in Stamford, Connecticut. This is a rare glimpse into the industry of Swiss private banking. The Swiss finance ministry turned over encrypted data on bank employees who served U.S. clients suspected of evading taxes to U.S. authorities on Tuesday. There are 10 other Swiss banks under investigation by the Justice Department, which include Credit Suisse, Julius Baer, and Basler Kantonalbank.
