Internal Revenue Service Targets Swiss Bank
UBS
Tribune De Geneve,
Switzerland
U.S. Tax Probe of
UBS Could Have 'Explosive Effect' on Swiss Banking
"The testimony of Bradley Birkenfeld, who worked for UBS in Geneva, is remarkable.
His description of the means used to deceive the American tax collector, is
astonishing … It remains to be seen - and this is the key question - whether
these actions and practices were specific to him, or whether as he claims they
were inspired, advised and even imposed by the bank itself."
By Pierre Ruetschi
Translated By Kate Davis
June 21 2008
Switzerland
- Tribune De Geneve - Original Article (French)
The indicators are once again
blinking red for UBS. The leading Swiss bank hasn’t made it through the
subprime crisis yet and now it has to deal with the Birkenfeld
affair. It's a case that bears the name of one of the bank’s former managers
who pleaded guilty Thursday before a Florida court of having helped very
wealthy clients evade their American taxes. [Birkenfeld
has admitted to being part of a team that hid over than $20 billion in assets
for U.S. clients].
The testimony of 43-year-old
Bradley Birkenfeld, who worked for UBS in Geneva from
2001 to 2006, is remarkable, and his description of the means used to deceive
the American tax collector quite astonishing. But it remains to be seen - and
this is the key question - whether these actions and practices were specific to
him, or whether as he claims they were inspired, advised and even imposed by
the bank itself, which is alleged to have set up a system.
Posted by WORLDMEETS.US
[Editor's Note: Mr. Birkenfeld’s testimony, the centerpiece of a widening
investigation into UBS and its wealthy American clients, blew a hole in the
wall of secrecy surrounding the world of Swiss banking. Under pressure from the
authorities, UBS has been considering disclosing the names of thousands of its
wealthy clients in the United States. Mr. Birkenfeld
was a Geneva-based director of wealthy American clients with undeclared
offshore accounts. Over all, that business oversaw $20 billion in assets and
brought in revenue of $200 million a year, according to court papers. ]
Is he a black sheep or simply
the executor of an institution's dark but lucrative scheme? From the moment he
decided to plead guilty, it is clear that Birkenfeld
had good reason to charge his employer and to play the role of the victim. A
“good” collaboration with the authorities and the naming of his richest
client-frauds will contribute to a reduction of his punishment.
But we must avoid any hasty
conclusions in an investigation that has the potential to have explosive
effects - for UBS of course, but more generally for the position of Swiss
finance. In the United States, tax evasion constitutes a crime. Targeted
investigations are conducted regularly to track down crooks like this.
By seeking joint judicial
cooperation from Switzerland, Washington is ratcheting-up the pressure and showing
its determination to completely expose the practices of UBS. The affair of the
escheated funds [funds returned to the state] has demonstrated the pugnacity
that the U.S. feels toward Swiss banking. At this stage, nothing indicates that
the Birkenfeld trial will take on such proportions.
But the enormous interests at stake, against a backdrop of
fierce competition between financial centers on both sides of the Atlantic,
contributes little to calming spirits. Nor does the
American presidential election, which is precisely engaged with fiscal
questions.
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FRENCH VERSION
[Posted by WORLDMEETS.US June
29, 6:41pm]