UBS probe finds some tax fraud
LONDON - UBS has discovered only a small number of tax-fraud cases as part of an investigation into whether the Swiss bank helped clients dodge American taxes, the bank's chairman, Peter Kurer, said yesterday.
"Our investigations have uncovered a limited number of cases of tax fraud under both US and Swiss law," Kurer told shareholders at a special meeting in Lucerne, Switzerland. He asserted that Swiss bank-client confidentiality agreements had not been broken in an unfolding investigation of the bank's activities, adding that the rules were not "there to protect cases of tax fraud."
The US Justice Department has argued that UBS, a huge bank based in Zurich that has extensive operations in the United States, helped as many as 17,000 of its American clients evade $300 million a year in taxes through hidden offshore accounts. Kurer's remarks contained no specifics about whether he disputed the US estimate.
Raoul Weil, who oversaw UBS's lucrative cross-border private banking operations until 2007, was indicted this month by a grand jury in Florida on a charge of conspiracy. Kurer asked for the support of shareholders.
The chairman said he was trying to navigate through difficult times. Shareholders applauded when Kurer noted that former executives and other managers had agreed to repay the bank a total of $59 million in bonuses. He added that UBS was still in discussions about getting more money back.
Marcel Ospel, who was the bank chairman when it accumulated more than $40 billion in write-downs on assets linked to the mortgage market in the United States, surrendered about $18 million. The former chief executive, Peter Wuffli, and the ex-finance chief, Marco Suter, also gave up some compensation.
Kurer reiterated that none of the bank's current managers would receive a bonus for 2008. 