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U.S. presses Swiss UBS bank for names of 52,000 suspected of tax evasion

The UBS memo was blunt: The "Swiss solution" could help affluent Americans.

That message, sent to the bank's executives in July 2004, referred to a UBS plan to help rich customers evade taxes by hiding money in offshore havens like the Bahamas.

The memo, along with dozens of e-mail messages like it, were disclosed on Thursday in a blistering court document filed by the Justice Department, which sought to compel UBS, based in Switzerland, to divulge the identities of 52,000 Americans whom the authorities suspect of using secret offshore accounts at the bank to dodge taxes.

The move came one day after UBS agreed to pay $780 million to settle claims that it defrauded the Internal Revenue Service and opened a new, unexpected front against the bank and Switzerland's long tradition of banking secrecy.

Federal authorities initially focused on 19,000 accounts, and UBS turned over 250 of them on Wednesday.

The court document alone dealt a stinging blow to UBS, whose corps of private bankers discreetly tend the fortunes of billionaires and mere millionaires. Filed in a Miami court, the papers provide a rare, inside look at the secretive ways of Swiss banking.

The 2004 memorandum described how UBS created hundreds of "dummy" offshore corporations where its clients could hide money from the IRS. An e-mail message sent that year captured some of the coded language used by UBS bankers.

Switzerland, meanwhile, desperately sought Thursday to reassure its citizens and international banking clients. "Banking secrecy, ladies and gentlemen, remains intact," President Hans-Rudolf Merz told reporters.

U.S. presses Swiss UBS bank for names of 52,000 suspected of tax evasion 02/19/09 [Last modified: Thursday, February 19, 2009 11:37pm]
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