US seeks to dismiss UBS criminal tax evasion case

* Justice Department says UBS has complied with agreement

* $780 million penalty paid

* UBS did not immediately return requests for comment

By Jonathan Stempel

NEW YORK, Oct 22 (BestGrowthStock) – The U.S. Department of Justice
is seeking to dismiss a criminal prosecution against UBS AG
that led to the Swiss bank paying a $780 million penalty and
admitting it helped wealthy U.S. clients evade taxes.

In a filing on Friday in the U.S. district court in Fort
Lauderdale, Florida, prosecutors said UBS (UBSN.VX: )(UBS.N: ) has
complied with an 18-month agreement to defer prosecution, after
helping roughly 17,000 clients with $20 billion of assets hide
their accounts from the Internal Revenue Service.

As part of the February 2009 settlement, Zurich-based UBS
handed over names on more than 250 client accounts and ended
its U.S. cross-border banking business.

It later revealed data on some 4,450 additional accounts
and the government said UBS is continuing to cooperate.

“UBS AG has fully complied with all of its obligations,”
senior litigation counsel Kevin Downing wrote in the filing.
“The United States believes that dismissal is appropriate.”

The settlement is considered a landmark in cracking
Switzerland’s famed bank secrecy. Dismissal of the case
requires court approval.

UBS spokeswoman Karina Byrne declined to comment.

“The UBS prosecution was historic and unique, and is a high
point in government tax enforcement,” said Peter Hardy, a
partner at Post & Schell PC in Philadelphia and former
prosecutor. “It has resulted in a systemic change in how
Switzerland views foreigners holding assets in their banks.”

On Friday, Swiss financial market regulator FINMA told
bankers and insurers in that country that they must understand
non-Swiss rules and take steps to mitigate or eliminate risks
stemming from cross-border activity. [ID:nLDE69L1BP]

Since the U.S. accord was announced, the federal government
has prosecuted several individual former UBS clients. At least
10 have been sentenced to terms ranging from probation to one
year in prison. [ID:nN17140652].

Meanwhile, about 15,000 Americans with offshore accounts
reported them voluntarily to the IRS under a 2009 amnesty

“The question now is whether the government can capitalize
on its gains, or be mired in the many cases on its plate”
following the voluntary disclosures, Hardy said.

The case is U.S. vs UBS AG, U.S. District Court, Southern
District of Florida, No. 09-60033.
(Reporting by Jonathan Stempel in New York; additional
reporting by Robin Bleeker in Geneva, Tom Brown in Miami and
Helen Kearney in New York)

US seeks to dismiss UBS criminal tax evasion case