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Oldest Swiss Bank Closing Down After Pleading Guilty in U.S. Federal Court
The oldest Swiss private bank, Wegelin & Co, pleaded guilty in U.S. District Court in Manhattan, and announced on Thursday that it is permanently closing down. Wegelin had been charged by U.S. authorities for helping super-rich Americans evade taxes through secret accounts.
Wegelin’s clients in U.S. include original European clients who were there even before the American Revolution took place. For centuries, it had provided safe haven and secret bank accounts to the superrich defying the laws of our nation.
Wegelin’s guilty plea and closing of shop marks a major point in the financial history of the country and a landmark victory for U.S. authorities against the traditional secrecy of Swiss banks.
However, closing down of the bank, and its guilty plea, does not automatically mean that it is going to disclose the names of its honored American clients who chose not to pay tax, and keep the money offshore in Wegelin’s secret accounts.
Under the guilty plea, Wegelin has agreed to pay $57.8 million to the United States in restitution and fines and has admitted to charges of conspiracy in helping Americans evade taxes on at least $1.2 billion for nearly a decade.
A managing partner of the bank, Otto Bruderer, admitted in court that “Wegelin was aware that this conduct was wrong.” He also said, “from about 2002 through about 2010, Wegelin agreed with certain U.S. taxpayers to evade the U.S. tax obligations of these U.S. taxpayer clients, who filed false tax returns with the IRS.”
Wegelin had been founded in 1741. Its statement issued on Thursday, observed, “Once the matter is finally concluded, Wegelin will cease to operate as a bank.”
In a statement following the guilty plea made by Wegelin, Assistant U.S. Attorney General Kathryn Keneally said it was a top priority of the DOJ “to find those who continue to shirk their tax obligations,” signaling to other banks under the scanner, that all is not well.
The case is U.S. v. Wegelin & Co et al, U.S. District Court, Southern District of New York, No. 12-cr-00002.