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Swiss bank Wegelin to close after US tax evasion

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7th Jan 2013
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Switzerland's oldest bank is set to close after pleading guilty in a New York court to helping Americans avoid taxes. 

The US district court in Manhattan heard how Wegelin helped US citizens avoid at least $1.2bn in taxes for almost a decade. 

The bank was founded in 1741, making it the 13th oldest bank in the world.

The bank agreed to pay the US $57.8m (£36m) in fines and compensation after admitting conspiracy charges dating from 2002 to 2010. 

Wegelin managing partner Otto Bruderer told the court the bank knew what it was doing was wrong.

“Wegelin was aware that this conduct was wrong. From about 2002 through about 2010, Wegelin agreed with certain US taxpayers to evade the US tax obligations of these US taxpayer clients who filed false tax returns with the IRS,” he said. 

Once Wegelin pays back the fines, it will stop operating as a bank.

According to a statement on its website, Wegelin will remain in existance "to finalise the closure of its remaining US client relationship and to continue negotiations with the US authorities in the current dispute between Switzerland and the USA.”

The bank offered a range of services to its national and international customers, including private banking and asset management.

Last January, three Wegelin bankers were indicted on charges, that were extended in February to include the bank, making it the first bank in recent memory to be prosecuted by the US.

When Swiss-based Wegelin executives didn't appear in court last February, the bank was declared a fugitive from justice.

Wegelin started to wind down its operations, partly through a sale of non-US assets to Raiffeisen Gruppe. Many of its existing Swiss customers have also been transferred to related entity Notenstein Private Bank. 

It's still undecided what will happen to the three Wegelin bankers, Roger Keller, Urs Frei and Michael Berlinka.

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