Business

Swiss bank guilty in US tax inquiry

NEW YORK — Switzerland’s oldest private bank Thursday admitted to helping Americans evade US taxes, the first time a foreign financial institution has pleaded guilty to tax law violations.

Representatives for Wegelin & Co. appeared in US District Court in Manhattan and acknowledged that for nearly a decade it helped dozens of wealthy Americans dodge taxes by hiding more than $1.2 billion in secret accounts.

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As part of the guilty plea, Wegelin agreed to pay $74 million in fines, restitution and forfeiture proceeds to the US government. Several Wegelin executives appeared at the hearing before Judge Jed S. Rakoff.

Although Wegelin ceases to exist as a business, the firm’s partners sold its non-US client accounts last January to Raiffeisen Group, an Austrian bank, just before its indictment. That was sharply criticized by Rakoff in a court hearing last year as a ‘‘fraud upon fraud.’’

The case strikes another blow at Swiss banking secrecy, a shadowy world that US authorities have penetrated recently after decades of looking the other way.

A federal grand jury in Manhattan indicted Wegelin in February. The firm’s scheme involved opening secret accounts for US clients and setting up sham entities to avoid detection in far-flung locales.

Included in the $74 million in penalties is about $16 million in forfeited proceeds Wegelin held in a UBS account in Connecticut.

New York Times

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