Sen. Carl Levin (D-MI) said federal regulators should consider revoking the US banking license of the giant Swiss Bank UBS because of its role in helping wealthy Americans evade billions of dollars in taxes.
"I don't think that any bank that goes to the extent that UBS has gone through to avoid doing what their agreements with the United States require them to do, should be allowed to continue to do business unless they clean up their act," Levin said.
UBS's role in arranging "undeclared" accounts for an estimated 19,000 to 52,000 US citizens was one focus of the Senate Permanent Subcommittee on Investigations. The role of the LGT bank, owned by the royal family of Liechtenstein, was also investigated.
Levin said UBS practices resulted in its U.S. clients maintaining undeclared Swiss accounts that amounted to "$18 billion dollars in assets hidden from the IRS.
Levin revealed a list of "secrecy tricks" he said the UBS bankers used to carry out their tax haven schemes.
Levin said UBS hid behind Swiss bank secrecy laws to hide its misconduct, and offered unlicensed services in the US. UBS is the world's largest private bank.
One of its bankers, Bradley Birkenfeld, has already pleaded guilty in the US to tax evasion and fraud and is cooperating with federal prosecutors in Miami.
In a plea agreement, Birkenfeld detailed how he said he had been trained by UBS to help wealthy Americans evade taxes.
In one case, Birkenfeld told prosecutors he purchased diamonds using a US client's Swiss bank account and smuggled the diamonds into the United States in a toothpaste tube.
For years, another bank, LGT Bank, in the tiny European principality of Liechtenstein, tucked between Austria and Switzerland, has also been regarded as a safe haven for wealthy Americans trying to hide their money from the IRS.
Liechtenstein is considered one of the most secretive places in the world.
That all changed when a disgruntled super geek at LGT, Heinrich Kieber, downloaded all the names and secret accounts on to two CDs and turned them over to tax authorities in the US and Europe.
In court documents, federal prosecutors say UBS bankers helped set up many of the secret accounts in Liechtenstein.
Prosecutors say part of the Swiss bank scam was for the bank managers to have a third party set up sham entities for the US clients in tax havens, such as Panama or the British Virgin Islands, who would pose as the owners of the entities.
The American tax evaders were probably very shocked when their information wound up in the hands of the Internal Revenue Service.
In a statement, UBS said it "has been working diligently with US and Swiss authorities" to provide information to US investigators.
The statement noted that information about tax fraud "is not protected by Swiss bank client confidentiality," suggesting it may turn over the names and account details of US citizens who had once been promised secrecy. However, the Swiss government threatened to confiscate any UBS records before they could be tuned over to the US.
A UBS executive, Mark Branson, said the bank will no longer provide "undeclared" accounts to US citizens and is "winding down" its business involving already existing accounts.
"We now know that our program had failures and misconduct did occur," Branson said in describing what he said was a UBS internal review.
"We are committed to taking both corrective and disciplinary measures," the UBS executive said.
Levin said he was "skeptical' about claims from UBS and LGT that they are changing their practices.
A spokesperson for the Liechtenstein embassy in Washington, D.C. said because it was still investigating the allegations raised in the hearing, "the Principality of Liechtenstein is not in a position to confirm specific allegations." Liechtenstein recently worked out an agreement with the UK and will also close any illegal British accounts without revealing the names of the clients.
Levin called for passage of new laws to end tax haven abuses.
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source: http://
i.abcnews.com/Blotter/story?id=5394214&page=1
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The US government and Swiss bank UBS have reached a deal to resolve a dispute over the disclosure of the names of American clients who are suspected of evading tax by holding offshore accounts.
Sen. Carl Levin (D-MI) said federal regulators should consider revoking the US banking license of the giant Swiss Bank UBS because of its role in helping wealthy Americans evade billions of dollars in taxes.
For years, another bank, LGT Bank, in the tiny European principality of Liechtenstein, tucked between Austria and Switzerland, has also been regarded as a safe haven for wealthy Americans trying to hide their money from the IRS. 
In a statement, UBS said it "has been working diligently with US and Swiss authorities" to provide information to US investigators.
Aug. 7 (Bloomberg) -- The U.S. and Switzerland need at least five more days to negotiate settlement of a Justice Department lawsuit against UBS AG. The DOJ and IRS are seeking the names of Americans suspected of evading taxes through 52,000 secret Swiss accounts.
The U.S. sued UBS for the account data on Feb. 19, a day after the bank admitted its Swiss private bankers helped wealthy Americans evade U.S. taxes from 2000 to 2007. UBS also admitted setting up sham companies in havens such as the British Virgin Islands, Hong Kong and Panama.
It is hard to believe that Phil Gramm was not aware of the UBS tax evasion scheme. 
