Pauley III ruled that the IRS can demand information from UBS about U.S. clients of Wegelin.
That may be the last chapter for Wegelin but not for the Swiss banking debacle.
FORBES: Judge Gives IRS Access To More Accounts At UBS And Wegelin
With branches only in Switzerland, Wegelin claimed it was bound only by Swiss banking laws.
FORBES: FATCA Cliff: Tax Evasion Guilty Plea And Death For Oldest Swiss Bank
Yet Wegelin capitulated and pleaded guilty, due in part to the nature of its activities.
In the wake of the Wegelin case, other Swiss banks will have to decide what to do.
Although Wegelin had no branches outside Switzerland, it accessed U.S. banking through a correspondent UBS account in Connecticut.
Charges remain pending against three Wegelin bankers, Michael Berlinka, Urs Frei, and Roger Keller, all residing in Switzerland.
This, plus the indictment of Wegelin, is expected to scare many Americans with offshore accounts into voluntarily coming forward.
Pauley III in New York ruled that the IRS can demand information from UBS about U.S. clients of Wegelin.
FORBES: Judge Gives IRS Access To More Accounts At UBS And Wegelin
The Swiss bank Wegelin is to close, after admitting that it helped about 100 US clients evade paying taxes.
The fact that the Wegelin names will come via UBS may seem ironic.
FORBES: Judge Gives IRS Access To More Accounts At UBS And Wegelin
Wegelin is the first foreign bank to plead guilty to U.S. tax charges.
Instead, Wegelin's guilty plea included the admission that it intentionally opened accounts for US citizens to help them avoid tax.
Sometimes Wegelin split monies into multiple wires or checks to reduce detection.
After all, when UBS was under scrutiny, many Americans moved accounts from UBS to the lower profile and more decidedly Swiss Wegelin.
FORBES: Judge Gives IRS Access To More Accounts At UBS And Wegelin
But no matter how harsh the Wegelin deal may seem, some in Switzerland and elsewhere seem strangely mollified by this stark news.
Many had expected Wegelin to continue to try to fight the case.
With branches only in Switzerland, Wegelin claimed to be bound only by Swiss banking laws, brazenly scooping up deposits after UBS jettisoned Americans.
It opened and serviced undeclared accounts for U.S. taxpayers, many from UBS. In effect, Wegelin scooped up UBS clients after UBS turned them away.
But why then have banks accused of similar criminal behavior on a far larger scale been able to avoid the same fate as Wegelin?
The IRS brought down the oldest Swiss bank with a guilty plea despite the fact that Wegelin has no U.S. offices and no U.S. presence.
FORBES: Judge Gives IRS Access To More Accounts At UBS And Wegelin
When Wegelin's managers pleaded guilty in a New York court, the case was watched with mounting horror by the financial communities in Zurich and Geneva.
Swiss banks see hope for tax probe deals after Wegelin demise.
The smaller and older Wegelin pled guilty and agreed to close.
It remains to be seen whether US authorities will continue with, or drop, parallel charges against three Wegelin bankers, Michael Berlinka, Urs Frei and Roger Keller.
The desire to end the legal battle would have been given added pique by the fact that Wegelin's partners have personal financial liability for the bank.
Wegelin employees told U.S. taxpayer-clients that their undeclared accounts would not be disclosed to U.S. authorities because the bank had a long tradition of secrecy, prosecutors said.
With no offices anywhere outside Switzerland, Wegelin was perfectly discreet.
FORBES: Judge Gives IRS Access To More Accounts At UBS And Wegelin
Swiss bank Wegelin to close after U.S. tax evasion fine.
FORBES: FATCA Cliff: Tax Evasion Guilty Plea And Death For Oldest Swiss Bank
In court, Wegelin's managers said they knew it was wrong, but thought they would not be prosecuted because it was legal in Switzerland and common practice in Swiss banking.
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