Wegelin, Switzerland’s oldest bank, to close due to tax evasion scandal

Wegelin & Co., Switzerland’s oldest bank, announced yesterday that it has helped Americans evade paying at least $1.2 billion in taxes over the past ten years, and said it will close after paying the United States $57.8 million in restitution and fines, Reuters reported. The bank was founded in 1741.

Otto Bruderer, a managing partner of Wegelin, appeared in US court to plead guilty on behalf of the bank, the first time a non-US bank has pleaded guilty to participating in a tax evasion scheme, the Financial Times reported.

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Bruderer said the bank maintained offshore accounts for US taxpayers who did not complete W-9 tax disclosure forms, the Financial Times reported.

“Wegelin intentionally opened and maintained non W-9 accounts for these taxpayers with the knowledge that, by doing so, Wegelin was assisting these taxpayers in violating their legal duties. Wegelin was aware that this conduct was wrong,” Bruderer said, according to the Financial Times.

It’s unknown whether the bank has turned over or plans to disclose the names of its American clients with secret accounts, Reuters reported.

According to the Guardian:

Although Wegelin will cease to exist, the bank's partners sold its non-American client accounts to the Austrian bank Raiffeisen just before its indictment last January.

Bruderer said Wegelin "believed it would not be prosecuted in the United States for this conduct because it had no branches or offices in the United States and because of its understanding that it acted in accordance with, and not in violation of, Swiss law and that such conduct was common in the Swiss banking industry,” the Guardian reported.

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