UBS ordered to share data on Wegelin clients with IRS

NEW YORK — The Internal Revenue Service can demand information from UBS AG about US clients of Wegelin & Co., the Swiss bank that pleaded guilty this month to conspiring to help cheat the IRS, a US judge ruled.

US District Judge William H. Pauley III signed an order in Manhattan federal court that authorized the IRS to serve a summons on UBS, the largest Swiss bank. The tax agency seeks records of Wegelin’s correspondent account at UBS, according to the Jan. 25 order announced Tuesday.

Those records will allow US authorities to determine who held assets at Wegelin and other Swiss institutions using the UBS account, according to US Attorney Preet Bharara. Wegelin admitted on Jan. 3 that it helped US taxpayers hide more than $1.2 billion in assets from the IRS.


‘‘Today’s summons is the latest step in our efforts to identify and prosecute US taxpayers who think they can evade their legal responsibility to pay taxes by secreting their money away in anonymous offshore accounts at Wegelin and other banks,’’ Bharara said in a statement.

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Pauley gave permission to the IRS to serve a so-called John Doe summons on UBS. In a court petition, Assistant US Attorney Natalie Kuehler said Wegelin held a correspondent account through a UBS office in Stamford, Conn.

‘‘Wegelin used the UBS correspondent account to provide offshore banking services to dozens of US taxpayers, who the IRS believes may have failed to report the existence of their Swiss bank accounts to the IRS and the Department of Treasury,’’ Kuehler wrote in the Jan. 25 filing.

In an indictment last year, prosecutors said that more than 100 US taxpayers conspired with Wegelin and Swiss bankers Michael Berlinka, Urs Frei, and Roger Keller to hide income from the IRS. Those individuals, who live outside the United States, were first indicted in January 2012 and haven’t appeared in court to answer the charges. The bank held more than $1.2 billion in assets not declared to the IRS, according to the indictment. The United States said Wegelin and the three bankers wooed US clients fleeing UBS AG, the largest Swiss bank. UBS avoided US prosecution in 2009 by admitting it aided tax evasion, paying $780 million, and handing over data on 250 accounts.