Swiss Bank Wegelin & Co. Pleads Guilty in U.S. Tax Probe

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Wegelin & Co., the 270-year-old Swiss bank, pleaded guilty to helping U.S. taxpayers hide more than $1.2 billion from the Internal Revenue Service.

Bloomberg reports that Otto Bruderer, an official at the St. Gallen-based bank, appeared in Manhattan federal court Thursday to enter a plea on the company’s behalf to a single count of conspiracy. Wegelin was indicted on February 2nd, becoming the first Swiss lender charged in a U.S. crackdown on offshore firms suspected of helping Americans evade taxes.

Under a proposed plea agreement, the bank will pay $20m in restitution to the U.S., forfeit $15.8m, representing fees on undeclared accounts, and pay a fine of more than $22m. The agreement requires the approval of U.S. District Judge Jed Rakoff. Sentencing is set for March 4.

'It has an important symbolic significance in that you have a bank that has no branches in the United States, but the U.S. government was able to reach them and get them to plead guilty', said Robert Fink, a tax attorney at Kostelanetz & Fink LLP in New York. 'It puts other banks on notice as to the long arm of the U.S. law'.

Prosecutors said that from 2002 to 2011, more than 100 U.S. taxpayers conspired with Wegelin, Zurich bankers Michael Berlinka, Urs Frei and Roger Keller, and others. The bank held more than $1.2bn in assets not declared to the IRS, according to the indictment.

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Swiss Bank Wegelin & Co. Pleads Guilty in U.S. Tax Probe

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