News Column

Oldest Swiss Bank Folds After US Tax Conviction

March 5, 2013
Bankhaus Wegelin & Co. in St. Gallen, Switzerland. (Wegelin & Co., Creative Commons)
Bankhaus Wegelin & Co. in St. Gallen, Switzerland. (Wegelin & Co., Creative Commons)

Switzerland's oldest bank Wegelin & Co announced Tuesday that it would soon close down, after a New York court convicted it of having aided US tax evaders.

The court ruled Monday that the 272-year-old private bank would have to pay a penalty of 58 million dollars, in addition to the 16 million dollars that had already been impounded in the United States.

The bank plead guilty of having helped US clients hide more than 1.2 billion dollars from tax authorities, by setting up accounts that were hard to trace.

It was the first time that a foreign bank was convicted in such a case, federal prosecutors said in New York.

Fearing such a high fine, Wegelin last year transferred its non-US assets to its subsidiary Notenstein Private Bank Ltd. Notenstein was then sold to the Swiss banking group Raiffeisen Schweiz.

US authorities have investigated 11 Swiss banks including Credit Suisse and UBS, and have arrested and charged several Swiss bankers in recent years.

Threatened by such lawsuits, Switzerland's government agreed last year to loosen its banking secrecy rules and has provided more banking data to US tax authorities.

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Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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