US sues Swiss bank to make it disclose secret accounts

February 20th, 2009 - 12:23 pm ICT by IANS  

Washington, Feb 20 (IANS) The US government has sued UBS, Switzerland’s largest bank, to force it to give the Internal Revenue Service secret account information on some 52,000 secret accounts that could contain nearly $15 billion in untaxed assets.

The suit Thursday came a day after the Justice Department announced an agreement in which UBS promised to provide secret account information. However, it appears only a small number of accounts may have been included in that agreement, CNN said.

The lawsuit filed Thursday in Miami says that as many as 52,000 US customers had secret UBS accounts to allegedly hide holdings from the US Internal Revenue Service (IRS). About 32,000 of the accounts contained cash and 20,000 contained securities, it said.

The Justice Department announced Wednesday that UBS had agreed to pay $780 million in fines and restitution, and to turn over the account information. The agreement was approved by a federal court in Fort Lauderdale, Florida.

The department cited a ruling by Swiss authorities that forced the bank to make the “unprecedented” disclosure of names of account holders, and it promised to drop a criminal charge against the bank if it complied with all terms of the agreement.

UBS Chairman Peter Kurer said in a statement Wednesday that they were “firmly committed to the terms of the settlement agreements we have reached” with both the Justice Department and the US Securities and Exchange Commission.

But after the lawsuit seeking additional names was filed Thursday, UBS issued a statement saying that it will “vigorously contest” enforcement of the IRS summons in the suit, and that contesting the summons is permitted under the agreement announced Wednesday.

“The IRS’s ‘John Doe’ summons seeks information regarding a substantial number of undisclosed accounts maintained by US persons at UBS in Switzerland, whose information is protected from disclosure by Swiss financial privacy laws,” said the new UBS statement.

A John Doe Summons is any summons where the name of the taxpayer under investigation is unknown and therefore not specifically identified.

The IRS Wednesday issued a statement warning the US customers of the bank that they would be pursued if they did not step forward and pay what they owed.

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