April 27, 2012 –
Judge orders forfeiture of $16M in U.S. bank account amid tax evasion claims

On April 24, 2012, the U.S. Justice Department announced that the Southern District of New York ordered a forfeiture of approximately $16 million held by Wegelin & Co. (“Wegelin”) in its U.S. correspondent account at a U.S. financial institution as part of a civil proceeding related to the U.S. Government’s criminal tax evasion case against the Swiss bank (United States v. All Funds on Deposit at UBS AG, Acct. No. 101-WA-358967-000, Held in the Name of Wegelin & Co., S.D.N.Y., No. 12 Civ. 836, forfeiture order 4/24/12) (“Forfeiture”). The Forfeiture was based on allegations that Wegelin committed a specified unlawful activity predicate crime of facilitating tax evasion and tax fraud (26 USC 7206(1) and 7201) to justify a charge of money laundering under 18 USC 1956.

Founded in 1741, Wegelin is Switzerland’s oldest bank and serves clients all over the world. While Wegelin has no branches outside Switzerland, U.S. prosecutors said, it directly accessed the U.S. banking system through a correspondent bank account that it held with UBS AG in Stamford, Connecticut.

Wegelin was indicted by the U.S. government in February 2012 on charges of conspiring to hide more than $1.2 billion of alleged assets for U.S. taxpayers from the Internal Revenue Service making Wegelin the first foreign bank to be charged by the U.S. government for facilitating tax fraud by U.S. taxpayers. According to the Forfeiture, Wegelin failed to appear in court to answer the charges.

The Forfeiture alleged that Wegelin and at least two other Swiss banks used the UBS account to covertly launder funds held in undeclared accounts of U.S. taxpayers in Switzerland so its U.S. taxpayer customers could have access to their money without detection. U.S. prosecutors said that the Forfeiture “should send a clear message that when a foreign bank tries to use the U.S. financial system to launder its dirty money, it will pay the price.”

Read the Forfeiture Complaint.