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I had not heard about this at all before, so this post is heavily borrowed from the BBC article in question discussing the closure and winding down of operations of Wegelin & Co, a Swiss Bank operating solely in Switzerland but providing services, apparently of an illicit nature, to American citizens.

Switzerland's oldest bank is to close permanently after pleading guilty in a New York court to helping Americans evade their taxes.


It said that once this was completed, it "will cease to operate as a bank".

The bank had admitted to allowing more than 100 American citizens to hide $1.2bn from the Inland Revenue Service for almost 10 years.

[note from Auron - "Inland" is likely an error because the UK's tax agency was referred to as "Inland Revenue" before being transferred to HM Revenue and Customs department.  The rest of the article makes clear that the charges relate to US citizens and no other UK ties are mentioned.]

Follow me below the stylized orange-flavored Swiss franc for slight analysis.

The bank actually has no branches in the US at all, making it a potentially difficult target for criminal charges in the US, but the charges were pursued by the US Attorney for the Southern District of New York, widely regarded as the most prominent of all US Attorney postings, second only to Main Justice (and often carrying out the will of Main Justice).

The more interesting thing is that, despite the scope of this, particularly the fact that the plea and sentence effectively closed the place down, it's not getting coverage in the US media.  The money shot?  Jeffrey Neiman, who used to work for the US Attorney's office:

"What is clear is that the Justice Department is aggressively pursuing foreign banks who have helped Americans commit overseas tax evasion."
So, yes, the government is going after the big banks.  And between charges like this and the US aggressively seeking Swiss banks' client lists, it seems like the days of "Swiss bank account" being a common term may be coming to an end.

10:04 PM PT: Hey folks - sorry for not tending, I've had an exhausting week and basically clocked out.  I've tried to respond to comments as I can and I did update with the name of the bank (d'oh!) but I do need to head out :(.

But, first time on reclist, woohoo!  Thank you so much :).

Fri Jan 04, 2013 at 4:05 AM PT: As I write this, the story is receiving US coverage - NPR this morning (4:05am West Coast) did a story about Wegelin.

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Comment Preferences

  •  I would love to know if Mitt was among them (29+ / 0-)

    or some other choice senior members of the republican party!

    "Kossacks are held to a higher standard. Like Hebrew National hot dogs." - blueaardvark

    by louisev on Thu Jan 03, 2013 at 07:55:33 PM PST

    •  When it comes to intentional tax evasion... (29+ / 0-)

      ...I'm totally "bi-partisan" in my desire to see the cheats prosecuted.

      Additionally, in regard to:

      it seems like the days of "Swiss bank account" being a common term may be coming to an end.
      I'd sure like to see "the Caymans" swept into the same trash heap...

      "The most potent weapon in the hands of the oppressor is the mind of the oppressed." ~ Steven Biko

      by Marjmar on Thu Jan 03, 2013 at 08:07:31 PM PST

      [ Parent ]

      •  Marjmar - there is nothing illegal about having an (7+ / 0-)

        account at a Swiss bank or one in the Cayman Islands as long as you report them to the IRS when they are established. The tax on the income on the assets held in "tax havens" is the same as if those assets were held in the US.

        "let's talk about that"

        by VClib on Thu Jan 03, 2013 at 09:59:04 PM PST

        [ Parent ]

        •  There is no point in having a swiss or carrib. (6+ / 0-)

          banking account if you are just going to report the balance and pay taxes on the interest...  unless you want to speculate in ChF i guess.

          •  Sandino - that's not correct (0+ / 0-)

            There are thousands of investments that are available only to people with foreign accounts because the sponsors of those investments don't want to register them with the SEC or deal with reporting to the IRS. In addition, many foreign accounts are outside the US legal system so that if someone has an adverse judgement the assets held offshore could not be attached. It's common for some professions, like physicians, to place some assets outside the control of the US court system.

            "let's talk about that"

            by VClib on Fri Jan 04, 2013 at 06:05:41 AM PST

            [ Parent ]

        •  I understand the difference between legal vs. not. (0+ / 0-)

          Still, my sentiment and desire stands.

          I think you're kidding yourself to think/believe folks place money in Swiss/Cayman accounts for reasons more weighty than evasion of US tax obligations...and that they honorably report the creation and income of and on those accounts.

          Maybe you're the exception? ;)

          "The most potent weapon in the hands of the oppressor is the mind of the oppressed." ~ Steven Biko

          by Marjmar on Fri Jan 04, 2013 at 09:23:12 PM PST

          [ Parent ]

          •  marjmar - there are tens of thousands (0+ / 0-)

            of US taxpayers with legal, offshore accounts. Every wealthy US based family has been advised to take a portion of their assets and put them offshore. Frequently those funds are in several countries and they often have residences there as well. It's smart contingency planning. If for some unlikely reason things in the US became problematic there is a plan in place, and available assets to relocate. At some level of wealth it makes no sense to hold all of your assets in any single country.

            There are also business reasons why people end up with foreign accounts. Every large venture capital, private equity and hedge fund has sister funds offshore for foreign investors. Every partner in those investment firms by default has foreign domiciled assets as the offshore funds have distributions.

            Those are just a few of the reasons along with those I mentioned earlier, access to investments not available for US based assets and shielding assets from the US civil court system.

            "let's talk about that"

            by VClib on Fri Jan 04, 2013 at 09:33:53 PM PST

            [ Parent ]

            •  Yes, I recall hearing many of those reasons... (0+ / 0-)

              ...about investment opportunities, etc. for creating offshore accounts...not too long ago...from Mitt Romney.


              "The most potent weapon in the hands of the oppressor is the mind of the oppressed." ~ Steven Biko

              by Marjmar on Sat Jan 05, 2013 at 06:18:50 PM PST

              [ Parent ]

              •  And those are perfectly legal if they are disclose (0+ / 0-)

                if they are disclosed to the IRS. As a partner in a private equity fund Romney had foreign assets just like every other partner at Bain Capital and every partner at every large private equity fund in the US. Income on those assets are taxed exactly the same as if the assets were domiciled in New York.

                "let's talk about that"

                by VClib on Sat Jan 05, 2013 at 07:37:58 PM PST

                [ Parent ]

  •  Just wondering ... (8+ / 0-)

    are they going after big banks, or banks that might in some corner of the world compete with Goldman Sachs?

    "Where are we to turn? We can only turn to ourselves." ~ Edward M. Kennedy

    by chapel hill guy on Thu Jan 03, 2013 at 08:08:45 PM PST

  •  I don't believe it. (5+ / 0-)

    Perhaps the bank will technically cease to exist, but deposits and owned assets aren't gonna disappear into a puff of purple smoke.
    I see businesses related to my line of work that go bankrupt, and re-incarnate the next week with a new (but similar) name.
    My friends who manufacture the specialty product I work with maintain insurance and have an emergency stash of $$$, but if they ever get frivolously lawsuited into non-existence, they fully intend to magically turn into another company selling the same product with the same properties, but with a new name.  They're just a small business with two owners and three employees, but they've got an emergency plan to stay in business, don't tell me some master of connivance like a Swiss bank doesn't have a sophisticated battle plan to deal with situations like this.

    Oh, and just what bank is this?  The diary doesn't name it, which seems rather odd to me.

    "Ronald Reagan is DEAD! His policies live on but we're doing something about THAT!"

    by leftykook on Thu Jan 03, 2013 at 08:11:01 PM PST

  •  Um, name of bank? (0+ / 0-)

    "Liberty without virtue would be no blessing to us" - Benjamin Rush, 1777

    by kovie on Thu Jan 03, 2013 at 08:12:17 PM PST

  •  The Bank's Name is Wegelinr (1+ / 0-)
    Recommended by:

    The most basic journalistic responsibilities include mentioning in your diary that the bank is named "Wegelin".

    "When the going gets weird, the weird turn pro." - HST

    by DocGonzo on Thu Jan 03, 2013 at 08:12:26 PM PST

  •  Nice catch, but (5+ / 0-)

    it would be helpful it you put the bank's name in your text, maybe even title, so it could be read without clicking through links and so on. This is not a bank most US consumers would recognize, so without that prompt they may be thinking UBS or similar.

    We are often so identified with whatever thoughts we may be having that we don’t realize the thoughts are a commentary on reality, and not reality itself. -- Gangaji

    by Mnemosyne on Thu Jan 03, 2013 at 08:18:40 PM PST

  •  The most interesting quote (5+ / 0-)

    in the linked diary is this:

    A major question was left hanging by the plea: Has the bank turned over, or does it plan to disclose, names of American clients to U.S. authorities? That is a key demand in a broad U.S. investigation of tax evasion through Swiss banks.
    Ultimately, that is the question that the Feds want answered.
  •  A little background, (9+ / 0-)

    Wegelin was founded in 1741. Earlier this year, the bank sold most of its assets to another Swiss bank because investors were worried about the US tax-evasion investigation. A snip for documentation:

    (Reuters) - On the morning of January 27, employees at the St. Gallen headquarters of Wegelin, Switzerland's oldest private bank, were told to expect an important announcement from Konrad Hummler, Wegelin's leading partner. Other Wegelin branches across Switzerland, also alerted, tuned in to the company-wide address system.

    Speaking in Swiss-German, Hummler announced the bank had sold most of its assets to another Swiss bank. According to a person familiar with the matter, Hummler called it a last-ditch effort to preserve employees' jobs amid withdrawals of assets by investors who were increasingly worried about a growing problem: a U.S. federal investigation into Wegelin's sale of tax-evasion services to wealthy Americans. The dark-suited bankers and conservatively dressed office clerks, said the person, were in shock and tears.

    In May, Bloomberg reported other transnational banks turning away Americans who wanted to evade taxes.
    HSBC decided last July that it would no longer offer wealth-management services to Americans from locations outside their home country after tax authorities stepped up a probe of the London-based bank’s U.S. clients.

    Americans would be “better served” by private bankers in the U.S., Goh Kong Aik, a spokesman for the firm in Singapore, said in an e-mail. He declined to say whether those who already have private-banking accounts abroad will be allowed to remain customers, except that they would be helped through an undefined “transition process.”

    Deutsche Bank said it terminated securities accounts held abroad by people with U.S. residency as of mid-2011. The action didn’t include checking or savings accounts and didn’t affect citizens living outside the U.S. The Frankfurt-based bank said “only a small number of customers” were affected.

    Americans were lining up to give up their citizenship:
    Rich Americans renouncing U.S. citizenship rose sevenfold since UBS AG (UBSN) whistle-blower Bradley Birkenfeld triggered a crackdown on tax evasion four years ago.

    About 1,780 expatriates gave up their nationality at U.S. embassies last year [2011], up from 235 in 2008, according to Andy Sundberg, secretary of Geneva’s Overseas American Academy, citing figures from the government’s Federal Register. The embassy in Bern, the Swiss capital, redeployed staff to clear a backlog as Americans queued to relinquish their passports.

    Don't believe it because you don't see it on tee-vee? The corporate media are distinctly not interested in informing the electorate. Rather they propagandize for the wealthy who control their comrades, who are also soulless entities. What they don't report is what matters ;)

    Like this.

    "Let each unique song be sung and the spell of differentiation be broken" - Winter Rabbit

    by cotterperson on Thu Jan 03, 2013 at 08:29:56 PM PST

    •  is there a parallel action within swiss banking (3+ / 0-)

      circles to sacrifice a goat and this was it?

      My ignorant impression is their banking system is extremely central to the economy and they would be harsh with anybody that got caught and was compliant and forced to out customers and endangered the Seekrits.

      This machine kills Fascists.

      by KenBee on Thu Jan 03, 2013 at 08:46:45 PM PST

      [ Parent ]

  •  Well... (1+ / 0-)
    Recommended by:
    CA wildwoman
    So, yes, the government is going after the big banks.
    Be nice if the government "went after" the "big" U.S. "banks" as well...  

    Returning violence for violence multiplies violence, adding deeper darkness to a night already devoid of stars... Martin Luther King, Jr.

    by ceebee7 on Thu Jan 03, 2013 at 08:49:59 PM PST

  •  Have we prosecuted the depositors (5+ / 0-)

    the Americans who were evading taxes?

    Kind of like arresting the prostitute and leaving the johns to walk away.

    I'm glad to see this, but there needs to be much, much, much more.  The depositors will just move their accounts to the Caymans or some other offshore tax haven.

    Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

    by Betty Pinson on Thu Jan 03, 2013 at 08:51:49 PM PST

    •  They've been seeking names from the Swiss for (2+ / 0-)
      Recommended by:
      Sandino, CA wildwoman

      quite awhile now, I suspect that the winding down of Wegelin will include names from at least this bank.  But they've been seeking names, iirc, ever since the administration came into power.  The Swiss government has been obsessive about secrecy but I think the dam may be starting to break.

      "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

      by auron renouille on Thu Jan 03, 2013 at 10:02:06 PM PST

      [ Parent ]

      •  Thanks! (1+ / 0-)
        Recommended by:
        CA wildwoman

        It will be great to see some of the 1% crowd do the perp walk.

        Democratic Leaders must be very clear they stand with the working class of our country. Democrats must hold the line in demanding that deficit reduction is done fairly -- not on the backs of the elderly, the sick, children and the poor.

        by Betty Pinson on Thu Jan 03, 2013 at 10:43:47 PM PST

        [ Parent ]

  •  But, but, but... (4+ / 0-)
    Recommended by:
    jan4insight, Davui, auron renouille, Emmy

    everybody around here says the Obama Administration is beholden to the banks.

    Is this some kind of error?

    Maybe GW's attorneys started this and the pretend liberal in the White House just couldn't find a way to stop it??

    Come on! This completely ruins several diaries I was set to run on my "theories" about PBO and the banks!

    Oh wait! That's it! He's helping the American multinational banks obliterate the foreign multinational banks, thus clearing the way for the NWO.

    Oh, it all makes sense now.

    Gotta' go. Time for another diary about my theories.

    There are only two types of Republicans: 1) racists; and 2) people who are willing to be associated with racists.

    by hillbrook green on Thu Jan 03, 2013 at 09:03:06 PM PST

    •  Well, it is a foreign bank. I'd like to see (3+ / 0-)
      Recommended by:
      MrJersey, Shippo1776, CA wildwoman

      some American banks and brokerages prosecuted for their creative financial instruments which tortured our economy so horribly.

      "The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

      by Lily O Lady on Thu Jan 03, 2013 at 09:46:49 PM PST

      [ Parent ]

  •  Holy wow, I step away for a bit and come back to (1+ / 0-)
    Recommended by:

    the reclist.

    I need to go to bed, have work in the morning, but awesome, thank you folks :).

    "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

    by auron renouille on Thu Jan 03, 2013 at 09:58:32 PM PST

  •  Wegelin is NOT a TBTF bank (4+ / 0-)

    The banks that are primarily vampire squids and zombies (they would be dead like Wegelin if they weren't so big and "systemically important") are the large money center banks, which pretty much means the list of the Federal Reserve's primary dealers (the banks the New York Fed uses to buy and sell into the financial markets):

    Bank of Nova Scotia, New York Agency
    BMO Capital Markets Corp.
    BNP Paribas Securities Corp.
    Barclays Capital Inc.
    Cantor Fitzgerald & Co.
    Citigroup Global Markets Inc.
    Credit Suisse Securities (USA) LLC
    Daiwa Capital Markets America Inc.
    Deutsche Bank Securities Inc.
    Goldman, Sachs & Co.
    HSBC Securities (USA) Inc.
    Jefferies & Company, Inc.
    J.P. Morgan Securities LLC
    Merrill Lynch, Pierce, Fenner & Smith Incorporated
    Mizuho Securities USA Inc.
    Morgan Stanley & Co. LLC
    Nomura Securities International, Inc.
    RBC Capital Markets, LLC
    RBS Securities Inc.
    SG Americas Securities, LLC
    UBS Securities LLC.
    There are also a few large banks, such as Wells Fargo, that are not Fed Primary Dealers, but which hold massive amount of derivatives. The Atlantic Monthly has an excellent article up about this particular issue: What’s Inside America’s Banks? which notes that over 90% of derivatives are held by only six TBTF banks. The Comptroller of the Currency issues a Quarterly Report on Bank Trading and Derivatives Activities that has that information.

    But go read the Atlantic Monthly article to understand that small players like Wegelin are not the problem.

    A chief executive of one of the nation’s largest financial institutions told us that he regularly hears from investors that the banks are “uninvestable,” a Wall Street neologism for “untouchable.”

    That’s an increasingly widespread view among the most sophisticated leaders in investing circles. Paul Singer, who runs the influential investment fund Elliott Associates, wrote to his partners this summer, “There is no major financial institution today whose financial statements provide a meaningful clue” about its risks. Arthur Levitt, the former chairman of the SEC, lamented to us in November that none of the post-2008 remedies has “significantly diminished the likelihood of financial crises.” In a recent conversation, a prominent former regulator expressed concerns about the hidden risks that banks might still be carrying, comparing the big banks to Enron....

    A crisis of trust among investors is insidious. It is far less obvious than a sudden panic, but over time, its damage compounds. It is not a tsunami; it is dry rot. It creeps in, noticed occasionally and then forgotten. Soon it is a daily fact of life. Even as the economy begins to come back, the trust crisis saps the recovery’s strength. Banks can’t attract capital. They lose customers, who fear being tricked and cheated. Their executives are, by turns, traumatized and enervated. Lacking confidence in themselves as they grapple with the toxic legacies of their previous excesses and mistakes, they don’t lend as much as they should. Without trust in banks, the economy wheezes and stutters.

    A conservative is a scab for the oligarchy.

    by NBBooks on Thu Jan 03, 2013 at 10:04:27 PM PST

  •  I'm missing the name of "the bank." (1+ / 0-)
    Recommended by:
    auron renouille

    It's late, I'm bleary-eyed, but three scans didn't find it.


    The Internet is just the tail of the Corporate Media dog.

    by Jim P on Thu Jan 03, 2013 at 10:14:05 PM PST

    •  My fault, it's Wegelin & Co. Left it out of diary (0+ / 0-)

      I'm pretty tired too :).

      "The first drawback of anger is that it destroys your inner peace; the second is that it distorts your view of reality. If you come to understand that anger is really unhelpful, you can begin to distance yourself from anger." - The Dalai Lama

      by auron renouille on Thu Jan 03, 2013 at 10:38:57 PM PST

      [ Parent ]

  •  Justice at last. (0+ / 0-)

    With $1 trillion / year in defense and trillions in bailouts for derivatives traders, and the rabble getting uppity about kicking in their medicare and social security to make up the difference, going after foreign banks makes the next most sense.

    "You can die for Freedom, you just can't exercise it"

    by shmuelman on Fri Jan 04, 2013 at 06:24:49 AM PST

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