Probe into a former UBS banker's role into suspected tax fraud. Bradley Birkenfeld, a Geneva-based US expat, is currently detained in Florida

The United States formally requests Swiss assistance in its probe into a former UBS banker's role into suspected tax fraud. Bradley Birkenfeld, a Geneva-based US expat, is currently detained in Florida awaiting a court appearance on charges of helping US citizens defraud tax authorities. Swiss officials indicate that they are likely to cooperate.US authorities made their formal request last Wednesday, Swiss Federal Justice Office spokesman Folco Galli confirmed. He declined to give details on the request, including how many people were involved or the exact charges.<br />However, Bradley Birkenfeld, a former private banker for UBS, who was most recently working for a Geneva financial services firm, is currently awaiting a court appearance in Florida on charges of tax fraud. US justice authorities arrested him during a trip to the country earlier this year, accusing Birkenfeld of helping a local property developer to secretly transfer 200 million dollars through accounts in Switzerland and Liechtenstein when he worked for UBS in 2001 to 2005. Mario Staggl, a Liechtenstein financial lawyer, is also wanted by US authorities. A network also encompassing offshore trusts or holding companies in Denmark, Gibraltar, the British Virgin Islands and Bahamas is mentioned in the US indictment. The New York Times has reported that Birkenfeld was cooperating with federal investigators and would implicate Switzerland's largest bank and other financial institutions in the scheme. His hearing at a US district court in southern Florida was originally scheduled early last week, but was postponed.<br />The case has raised fears in Switzerland that several thousand names of US account holders could be revealed during the court case, thereby delivering a blow to Swiss banking secrecy and UBS's reputation in the private banking sector. That part of the bank's business has so far emerged largely unscathed from the recent financial turmoil involving its investment banking units. UBS and its customers are meant to declare their American-sourced income to US tax authorities under an agreement they reached in 2001, in line with other international banks.<br />While Swiss secrecy law effectively rules out probes into tax evasion - which is not a criminal offence in Switzerland but a misdemeanour - secrecy is lifted in criminal cases. The indictment lodged at a US district court in southern Florida against Birkenfeld and Staggl clearly accuses them of "tax fraud", which is a criminal offence in Switzerland. Equally, the indictment says the evasion scheme involved falsifying Swiss bank documents and internal revenue service forms. Falsification of documents has often been central to determining fraudulent behaviour in previous legal cases in Switzerland.Other Swiss officials, who declined to be identified, have told Swisster that they were likely to cooperate with US investigators, depending on the exact form of the official request. However, the scope of cooperation would also depend on the ability of US justice authorities to name those it suspects of involvement in fraud.At the Federal Justice Office, Galli said that he could not give further details while the procedure was underway. "Swiss authorities are examining the [US] request with a view to administrative assistance or judicial assistance," he told Swisster. Administrative assistance would limit the scope of a probe in Switzerland to Swiss tax authorities, rather than the magistrates who would have wider powers to unlock bank account details.

Probe into a former UBS banker's role into suspected tax fraud. Bradley Birkenfeld, a Geneva-based US expat, is currently detained in Florida

The United States formally requests Swiss assistance in its probe into a former UBS banker's role into suspected tax fraud. Bradley Birk...

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Switzerland's role as secret banker to the world’s wealthy is under threat as never before

Last week The New York Times quoted Konrad Hummler, the managing partner of Wegelin & Company, a small private bank in the canton of St. Gallen.The nervous Herr Hummler warned that Switzerland's role as secret banker to the world’s wealthy is under threat as never before, as he sees it. Hummler said what we all know -- that the German tax evasion scandal involving Liechtenstein has been manipulated by the media into a debate about Swiss banking secrecy, just as Europe's Leftists wanted. Worried at the degree to which the traditional discretion of Swiss banks is under assault, Hummler said his foreign clients have been inquiring about their money. The nervous Herr Hummler says that this time, Switzerland may not be able to stop the rest of the world from prying open Swiss banking.

Switzerland's role as secret banker to the world’s wealthy is under threat as never before

Last week The New York Times quoted Konrad Hummler, the managing partner of Wegelin & Company, a small private bank in the canton of St....

Read more »