Under the radar screens of most Americans last week, a huge tax fraud case that implicates Switzerland’s leading bank was exposed. The case, which implicates a former American manager at UBS named Bradley Birkenfeld, could involve up to $20 billion and result in undermining Switzerland’s long-cherished reputation for bank secrecy.
Pierre Ruetschi writes for the Tribune De Geneve:
“The testimony of 43-year-old Bradley Birkenfeld, who worked for UBS in Geneva from 2001 to 2006, is remarkable, and his description of the means used to deceive the American tax collector quite astonishing. But it remains to be seen – and this is the key question – whether these actions and practices were specific to him, or whether as he claims they were inspired, advised and even imposed by the bank itself, which is alleged to have set up a system. ”
And the potential consequences?:
“We must avoid any hasty conclusions in an investigation that has the potential to have explosive effects – for UBS of course, but more generally for the position of Swiss finance. … the enormous interests at stake, against a backdrop of fierce competition between financial centers on both sides of the Atlantic, contributes little to calming spirits.”
By Pierre Ruetschi
Translated By Kate Davis
June 21 2008
Switzerland – Tribune De Geneve – Original Article (French)
The indicators are once again blinking red for UBS. The leading Swiss bank hasn’t made it through the subprime crisis yet and now it has to deal with the Birkenfeld affair. It’s a case that bears the name of one of the bank’s former managers who pleaded guilty Thursday before a Florida court of having helped very wealthy clients evade their American taxes. [Birkenfeld has admitted to being part of a team that hid over than $20 billion in assets for U.S. clients].
The testimony of 43-year-old Bradley Birkenfeld, who worked for UBS in Geneva from 2001 to 2006, is remarkable, and his description of the means used to deceive the American tax collector quite astonishing. But it remains to be seen – and this is the key question – whether these actions and practices were specific to him, or whether as he claims they were inspired, advised and even imposed by the bank itself, which is alleged to have set up a system.
[Mr. Birkenfeld’s testimony, the centerpiece of a widening investigation into UBS and its wealthy American clients, blew a hole in the wall of secrecy surrounding the world of Swiss banking. Under pressure from the authorities, UBS has been considering disclosing the names of thousands of its wealthy clients in the United States. Mr. Birkenfeld was a Geneva-based director of wealthy American clients with undeclared offshore accounts. Over all, that business oversaw $20 billion in assets and brought in revenue of $200 million a year, according to court papers. ]
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