UBS reveals US client details to Federal authorities

11 November 2008

The glamorous image of Switzerland as possibly the most glamorous offshore tax haven, famed for its banking secrecy, and long been home to substantial secret assets from the rich and famous throughout the world, has now been breached with wealth manager UBS  having disclosed information on 70 American clients to the US tax authorities investigating tax evasion.

The reveling of the 70 American account holders in UBS came when the US authorities requested the Swiss to reveal names of Americans holding 'undeclared' accounts in UBS as it was required by the US Justice Department to investigate accounts which was not declared to the Internal Revenue Service.

The US Justice Department's request was based on the revelations of a former UBS employee, Bradley Birkenfeld, who cooperated with the authorities in revealing details of accounts in lieu for a lighter sentence in a case where he pleaded guilty for helping a real estate developer conceal $200 million and evade $7.2 million in taxes.

UBS business methods were disclosed by Birkenfeld to the Senate, who concluded that UBS had broken the US banking and securities law.

At a Senate hearing, Mark Branson, a senior UBS executive admitted that misconduct had occurred and said approx 19,000 Americans held undeclared accounts with the bank in Switzerland.

Investigators have also managed to lay their hands on an additional 30 American holders of undeclared UBS accounts from whistle blowers who are entitled to get 30 per cent of the money IRS is able to recover with their input.