Wegelin to cease trading after US tax breaches

4 January 2013

Historic European bank Wegelin will cease trading after admitting it breached numerous tax regulations in the US.

It emerged today (4 January) that Switzerland's oldest financier - which was established in 1741 - has pleaded guilty in federal court in Manhattan to accusations of helping its American clients hide in excess of $1.2 billion from the Internal Revenue Service (IRS).

Consequently, the bank agreed to pay a total of around $58 million in penalties, including a fine of $22 million, restitution worth $20 million to the IRS and an extra $15.8 million in order to repay the gross fees it has earned from undeclared customer accounts over the last decade.

Preet Bharara, US attorney, said this action represents a "watershed moment" in regulators' efforts to crackdown on "unlawful conduct".

"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 US. law enforcement," the official added.

By Gary Cooper

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