The Fall of the Global Banking Cabal?
Could this be the first tangible evidence:
The Powers That Are
The Powers That Were?
What isn’t being shared with the public is a HUGE power struggle among “Central Planners” (aka global Bankers/Financiers). Expect more shake-ups in year 2013…
January 4, 2013
Case is U.S. v. Wegelin, 12-cr-00002, U.S. District Court, Southern District of New York (Manhattan).
“Wegelin & Co., Switzerland’s oldest private bank, may pay U.S. authorities as much as $74 million after pleading guilty to helping American taxpayers hide assets from the Internal Revenue Service.
Otto Bruderer, a managing partner at the St. Gallen-based bank, entered the plea yesterday to one count of conspiracy in Manhattan federal court. Wegelin in February became the first Swiss lender indicted in a crackdown on offshore firms suspected of helping Americans evade taxes.”
Later Reuters reported:
Swiss bank Wegelin to close after guilty plea
Swiss bank Wegelin to close after guilty plea
January 04, 2013 NEW YORK (Reuters) Nate Raymond and Lynnley Browning –
Wegelin & Co, the oldest Swiss private bank, said on Thursday it would shut its doors permanently after more than 2 1/2 centuries, following its guilty plea to charges of helping wealthy Americans evade taxes through secret accounts.
The plea, in U.S. District Court in Manhattan, marks the death knell for one of Switzerland’s most storied banks, whose original European clients pre-date the American Revolution. It is also potentially a major turning point in a battle by U.S. authorities against Swiss bank secrecy.
A major question was left hanging by the plea: Has the bank turned over, or does it plan to disclose, names of American clients to U.S. authorities? That is a key demand in a broad U.S. investigation of tax evasion through Swiss banks.
“It is unclear whether the bank was required to turn over American client names who held secret Swiss bank accounts,” said Jeffrey Neiman, a former federal prosecutor involved in other Swiss bank investigations who is now in private law practice in Fort Lauderdale, Florida.
“What is clear is that the Justice Department is aggressively pursuing foreign banks who have helped Americans commit overseas tax evasion,” he said.
Charles Miller, a Justice Department spokesman, declined to comment immediately.
Wegelin admitted to charges of conspiracy in helping Americans evade taxes on at least $1.2 billion for nearly a decade. Wegelin agreed to pay $57.8 million to the United States in restitution and fines.
Otto Bruderer, a managing partner at the bank, said in court that “Wegelin was aware that this conduct was wrong.”
He said that “from about 2002 through about 2010, Wegelin agreed with certain U.S. taxpayers to evade the U.S. tax obligations of these U.S. taxpayer clients, who filed false tax returns with the IRS.”
INITIALLY VOWED TO RESIST
When Wegelin last February became the first foreign bank in recent memory to be indicted by U.S. authorities, it vowed to resist the charges. The bank, founded in 1741, was declared a fugitive from justice when its Swiss-based executives failed to appear in U.S. court.
The surprise plea effectively ended the U.S. case against Wegelin, one of the most aggressive bank crackdowns in U.S. history.
“Once the matter is finally concluded, Wegelin will cease to operate as a bank,” Wegelin said in a statement on Thursday from its headquarters in the remote, small town of St. Gallen next to the Appenzell Alps near the German-Austrian border.
But the fate of three Wegelin bankers, indicted in January 2012 on charges later modified to include the bank, remains up in the air. Under criminal procedural rules, the cases of the three bankers – Michael Berlinka, Urs Frei and Roger Keller – are still pending.,
Although Wegelin had about a dozen branches, all in Switzerland, at the time of its indictment, it moved quickly to wind down its business, partly through a sale of its non-U.S. assets to regional Swiss bank Raiffeisen Gruppe.
A corporate indictment can be a death knell. In 2002, accounting firm Arthur Andersen went out of business after being found guilty over its role in failed energy company Enron Corp. A 2005 Supreme Court ruling later overturned the conviction, but it was too late to save the company.
Wegelin, a partnership of Swiss private bankers, was already a shadow of its former self – it effectively broke itself up following the indictment last year by selling the non-U.S. portion of its business.
Dozens of Swiss bankers and their clients have been indicted in recent years, following a 2009 agreement by UBS AG, the largest Swiss bank, to enter into a deferred-prosecution agreement, turn over 4,450 client names and pay a $780 million fine after admitting to criminal wrongdoing in selling tax-evasion services to wealthy Americans.
William Sharp, a tax lawyer in Tampa, Florida, with many U.S. clients of Swiss banks, said Wegelin’s plea “should serve as a wake-up call” to the world banking community servicing U.S. clients to takes steps to ensure compliance with U.S. law.
Sharp called Wegelin’s change of heart “shocking.”
Banks under U.S. criminal investigation in the wider probe include Credit Suisse, which disclosed last July it had received a target letter saying it was under a grand jury investigation.
Zurich-based Julius Baer and some cantonal, or regional, banks are also under scrutiny, sources familiar with the probes previously told Reuters. So are UK-based HSBC Holdings and three Israeli banks, Hapoalim, Mizrahi-Tefahot Bank Ltd and Bank Leumi, sources also said previously.
Those banks have not commented on the inquiries.
In a statement after the plea, Assistant U.S. Attorney General Kathryn Keneally said it was a top Justice Department priority “to find those who continue to shirk their tax obligations,” as well as those who help them and profit from it.
“The best deal now for these folks is to come in and ‘get right’ with the IRS, before either the IRS or the Justice Department finds them,” she said.
Under its plea, Wegelin agreed to pay the $20 million in restitution to the IRS as well a civil forfeiture of $15.8 million, the Justice Department said.
Wegelin also agreed to pay an additional $22.05 million fine, the Justice Department said. U.S. District Judge Jed Rakoff, who must approve the monetary penalties, set a hearing in the case for March 4 for sentencing.
Last year, the U.S. government separately seized more than $16 million of Wegelin funds in a UBS AG account in Stamford, Connecticut, via a civil forfeiture complaint.
Since Wegelin has no branches outside Switzerland, it used UBS for correspondent banking services, a standard industry practice, to handle money for U.S.-based clients.
In court papers, Bruderer said that Wegelin “believed it would not be prosecuted in the United States for this conduct because it had no branches or offices in the United States and because of its understanding that it acted in accordance with, and not in violation of, Swiss law and that such conduct was common in the Swiss banking industry.”
The case is U.S. v. Wegelin & Co et al, U.S. District Court, Southern District of New York, No. 12-cr-00002.
(Additional reporting by Martin De Sa’Pinto in Zurich; Editing by John Wallace, Steve Orlofsky and Peter Cooney)
Swiss Bank Wegelin & Co. Pleads Guilty in U.S. Tax Probe
Wegelin & Co., Switzerland’s oldest private bank, may pay U.S. authorities as much as $74 million after pleading guilty to helping American taxpayers hide assets from the Internal Revenue Service.
Otto Bruderer, a managing partner at the St. Gallen-based bank, entered the plea yesterday to one count of conspiracy in Manhattan federal court. Wegelin in February became the first Swiss lender indicted in a crackdown on offshore firms suspected of helping Americans evade taxes.
“From about 2002 through about 2010, Wegelin agreed with certain U.S. taxpayers to evade the U.S. tax obligations of these U.S. taxpayer clients, who filed false tax returns with the IRS,” Bruderer, reading from a statement, told U.S. District Judge Jed S. Rakoff.
Under a proposed plea agreement, the bank will pay $20 million in restitution to the U.S., forfeit $15.8 million that represents fees on undeclared accounts and pay a fine of more than $22 million. The agreement requires Rakoff’s approval. Sentencing is set for March 4.
Taken together with the $16.2 million Wegelin forfeited from a U.S. correspondent bank account in April, the government would receive a total of about $74 million, Manhattan U.S. Attorney Preet Bharara said yesterday in a statement.
“It has an important symbolic significance in that you have a bank that has no branches in the U.S., but the U.S. government was able to reach them and get them to plead guilty,” said Robert Fink, a tax attorney at Kostelanetz & Fink LLP in New York. “It puts other banks on notice as to the long arm of the U.S. law.”
Prosecutors said that more than 100 U.S. taxpayers conspired with Wegelin and with Swiss bankers Michael Berlinka, Urs Frei and Roger Keller to hide income from the IRS. The individual defendants, who live outside the U.S., 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 U.S. said Wegelin and the three bankers wooed U.S. clients fleeing UBS AG (UBSN), the largest Swiss bank. UBS avoided U.S. prosecution in 2009 by admitting it aided tax evasion, paying $780 million and handing over data on 250 accounts. It later disclosed information on about 4,450 more accounts.
By attracting ex-UBS clients, Wegelin opened new undeclared accounts for at least 70 U.S. taxpayers, according to the indictment. Most of those accounts were given an internal code of “BNQ,” indicating the accounts were undeclared.
“Wegelin became a haven for U.S. taxpayers seeking to circumvent the tax code by hiding their money in secret offshore accounts, and the bank willfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from U.S. law enforcement,” Bharara said.
The effort to woo UBS clients was backed by Wegelin’s senior management, according to the indictment.
Earlier in the case, Wegelin declined to answer the charges or appear in court, prompting Rakoff to declare the bank a “fugitive.”
“The Justice Department is sending a message that not every bank gets a deferred-prosecution agreement,” said Larry Campagna, a Houston tax attorney at Chamberlain, Hrdlicka, White, Williams & Aughtry. “A deferred-prosecution agreement essentially says that if you keep your nose clean going forward, we won’t prosecute you for what you did in the past.”
The U.S. and Switzerland are in talks to resolve a U.S. probe of offshore tax evasion. Wegelin was one of at least 11 banks under criminal investigation by the Justice Department’s tax division.
Wegelin, founded in 1741, “will cease to operate as a bank” once the matter has concluded, the firm said in a statement yesterday. The managing partners spent 2012 focusing on the legal proceedings.
Wegelin, which had $25 billion in assets in December 2010, announced on Jan. 27 it agreed to a sale to Switzerland’s Raiffeisen Group. In the announcement, Wegelin said any liability for the firm’s U.S. business would remain with the current partners. Wegelin didn’t disclose the sale price.
“Wegelin believed that, as a practical matter, it would not be prosecuted in the U.S. for this conduct because it had no branches in the U.S. and because of its understanding that it acted in accordance with, and not in violation of, Swiss law and that such conduct was common in the Swiss banking industry,” Bruderer told Rakoff in yesterday’s hearing.
The case is U.S. v. Wegelin, 12-cr-00002, U.S. District Court, Southern District of New York (Manhattan).
To contact the editor responsible for this story: Michael Hytha at email@example.com