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February 18th, 2009
05:54 PM ET

Swiss bank UBS admits hiding U.S. citizens' money from IRS

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2008/US/06/30/irs.swiss.accounts/art.irs.form.pd.jpg]
Terry Frieden
CNN Justice Producer

Switzerland's largest bank, UBS, has admitted helping U.S. taxpayers hide money from the IRS, and has agreed to pay $780 million dollars in fines and restitution, and turn over account information.

The deferred prosecution agreement was approved Wednesday by a federal court judge in Ft. Lauderdale, Florida.

"UBS admitted to conspiring to defraud the United States by impeding the IRS," the Justice Department announced late Wednesday.

The statement says that UBS, "in an unprecedented move" based on an order by Swiss authorities has agreed "to immediately provide the U.S. government with the identities of, and account information for, certain U.S. customers of UBS's cross-border business".

UBS also has agreed to end its business practice of providing banking services to U.S. customers with undeclared accounts.

"Swiss bankers routinely traveled to the United States to market Swiss bank secrecy to United States clients interested in attempting to evade U.S. income taxes," the Justice Department said.

The government document says Swiss bankers made a total of about 3,800 trips to discuss their clients' accounts.

The government said that because the bank has acknowledged responsibility for its actions has cooperated fully, and taken remedial actions, if it continues to cooperate the U.S. will recommend dismissal of the criminal charge "provided the bank fully carries out its obligations under the agreement".

Two former UBS bankers had pleaded guilty to charges of conspiracy for similar conduct.

The acting head of the Justice Department tax division called Wednesday's agreement "but one milestone" in the effort to make sure U.S. citizens pay their fair share of taxes.

"The veil of secrecy has been pulled aside and we will continue to aggressively pursue those who shirk their federal tax obligations, or assist others in doing so," said John DiCicco, Acting Assistant Attorney General for the Justice Department Tax Division.

IRS Commissioner Doug Shulman, issued a warning to the taxpayers who held the accounts to voluntarily pay up.

Shulman said the taxpayers should note that today's agreement also stipulates that the U.S. government will continue to seek enforcement of its court action.

"People who have hidden unreported income off shore need to get right with their government. They should come forward and take advantage of our voluntary disclosure process," Shulman said.


Filed under: Crime & Punishment • Economy
soundoff (17 Responses)
  1. wardell Katrina Survivor

    SHOULD WE REALLY BE SURPRIZED,and all the kings men&women came falling down, hip-hip–hip-hip, who what,WHERE's the MONEY??? regardless of how BIG ,they should go down, look at where our country is, THIS IS BADD,and BIGGG,people on the streets , have to go to jail, even wesley is going, so let,s see if Lady Justice is really BLIND?? If you come to NewOrleans, you can get anything you want, 24-7, if you know where to look,soliciting is illegal, but David didn't get charged, tax evasion is also illegal, let's see if the BIG FISH,endure the wrath of the IRS. People need to go DOWN, we know they didn,t hide peanuts, I don,t know about YOU, but I'm starting to feel some, can you say "STIMULATION".And the beat goes on. Now let's go after those 400 times you salary , individuals,and BILLIONS, not millions in bonuses. The GREAT AMERICAN RIPP-OFF, should have to be accounted for, from the TOP!!! God bless You ALL. Except THEM, Lord forgive me.

    February 19, 2009 at 3:09 am |
  2. Robert Noble

    Our new Attorney General was talking about people like RON CHRISTIE when he made the comment about a nation of cowers, it is because people like RON is the reason we still have to deal with racism. Everyone on the show knew the picture was racist and I wish Anderson Cooper (how I respect very much) would have told him so.

    P.S. this was not about political parties, it was about race.

    February 19, 2009 at 2:57 am |
  3. John

    Good! A list should be forthcoming, especially if it contains names of those we trust in government. Sure, everyone wants to save money, but the majority of us do so according to our laws.

    February 18, 2009 at 11:55 pm |
  4. Judy A YOOPER

    This is an interesting development considering a former president of Switzerland is a top guy for Sir Allen Stanford who is being investigated by the Securities Exchange Commission,(SEC). By the way The Stanford Eagle is very impressive.

    February 18, 2009 at 11:53 pm |
  5. Carmens

    How come the news is not talking about the money hidden from the IRS.

    February 18, 2009 at 10:42 pm |
  6. Paul Ernest show

    If the purpose is to avoid taxes, then it is wrong and a crime. If some of these folks have paid taxes on these incomes, then why bother. I hope these Swiss banks would go further to reveal and return all the money all they African rogue leaders have stolen and left their country men and women to perish in poverty and sickness.

    February 18, 2009 at 10:33 pm |
  7. SLATEN

    This is a whole new meaning to "Show Me The Money".

    February 18, 2009 at 10:18 pm |
  8. Annie Kate

    I'd love to see this list. I can't imagine having so much money I had to hide it in another country. Maybe the IRS will recover enough taxes from this to cover some of that stimulus bill.

    February 18, 2009 at 9:03 pm |
  9. Gerry in Toronto

    This is a very important victory for the IRS. That ruling eliminates Switzerland as an off shore haven for tax evaders and criminals hiding drug money.

    I expect all Swizz banks will run to the US government to do deals and limit their liability. Now the Caymans.

    February 18, 2009 at 8:38 pm |
  10. Mari, Salt Lake City

    What else is new?????????????????? This has been going on for ages!

    February 18, 2009 at 8:23 pm |
  11. Jack Holbrook

    while i admire the bank for telling the truth i also think its not responsible to hide money from those who deserve it.

    February 18, 2009 at 8:21 pm |
  12. Marvin

    I'm waiting to see who's on the list...and how long this has been silent...but of course whoever the list contain..are gettn lawyers as we speak.....throw them in jail...

    February 18, 2009 at 7:37 pm |
  13. Eric

    Maybe if our tax system was fair, people wouldn't need to keep their money in Switzerland, Cayman Islands, etc.

    February 18, 2009 at 7:20 pm |
  14. sean brizendine

    voluntary disclosure process sounds pretty fair instead of jail for not paying taxes.
    "sean in santa rosa"

    February 18, 2009 at 6:47 pm |
  15. jarrod Newark, Ohio

    uh oooo nowhere to hide anybody see the smoke in the gopher hole?

    February 18, 2009 at 6:14 pm |
  16. Joanne Pacicca, Solvay, NY

    Yes, and Swiss banks hold the "treasures" confiscated from Hitler's victims as well....this is simply wrong.

    February 18, 2009 at 6:05 pm |
  17. Stacy, Fairfax, VA

    Glad to hear it, but it's no surprise that many Americans hide millions if not billions overseas. They also need to check out the banks in the Caribbean, particularly the Cayman Islands.
    I wonder who is on the list? I bet there are a lot of very rich people who are contacting their lawyers tonight.

    February 18, 2009 at 6:05 pm |