Switzerland’s oldest private bank, Wegelin, has announced it would “cease to operate as a bank,” following its admission to tax-law violations in the US. Wegelin released a statement late on Thursday confirming its closure “once the matter is finally concluded.”
The Swiss bank agreed to pay $57.8 million in fines after admitting to conspiracy charges of helping at least 100 US clients conceal large sums of money from the federal tax collection agency in overseas accounts.
During a court hearing the managing partner of the bank, Otto Bruderer, confirmed that Wegelin “was aware that this conduct was wrong.” From 2002 through to 2010, Wegelin “agreed with certain US taxpayers to evade the US tax obligations of these US taxpayer clients, who filed false tax returns with the IRS,” Bruderer said as cited by the Guardian.
Wegelin’s scheme allegedly involved setting up sham entities in various offshores and opening secret accounts for US clients under code names. It is unclear however if the bank will be forced to hand over the names of US clients who held secret accounts at the bank.
Wegelin became a refuge for US tax evaders and filled the void after “other Swiss banks abandoned the practice due to pressure from US law enforcement,” according to US prosecutor Preet Bharara, who was hailed as the man busting Wall Street on the cover of the Time magazine last February.
Although the bank itself will vanish, its international clients’ accounts will survive as last January Wegelin sold its non-US business to Austrian bank, Raiffeisen.