Sen. Levin: Shut Down Giant Swiss Bank UBS

Federal regulators should consider revoking the US banking license of the giant Swiss Bank UBS because of its role in helping wealthy Americans evade billions of dollars in taxes, Sen. Carl Levin (D-MI) told ABC News today.

"I don't think that any bank that goes to the extent that UBS has gone through to avoid doing what their agreements with the United States require them to do, should be allowed to continue to do business unless they clean up their act," Levin said.

UBS's role in arranging "undeclared" accounts for an estimated 19,000 US citizens was one focus of a hearing by the Senate Permanent Subcommittee on Investigations, chaired by Levin today. The role of the LGT bank, owned by the royal family of Liechtenstein, was also investigated.

(click here to read the full Senate investigative report)

Levin said UBS practices resulted in its U.S. clients maintaining undeclared Swiss accounts that collectively held "$18 billion dollars in assets that have been kept secret from the the IRS."

"They wanted secrecy. UBS gave them secrecy," Levin said.

Levin revealed a list of "secrecy tricks" he said the UBS bankers used to carry out their tax haven schemes.

(click here to see the secrecy tricks list)

The list includes code names for clients, using untraceable pay phones, encrypted computers, fake trusts, counter-surveillance training, and shredding files.

Levin said UBS hid behind Swiss bank secrecy laws to hide its misconduct, and offered services in the US it was not licensed to provide.

UBS is the world's largest private bank catering to wealthy individuals.

One of its bankers, Bradley Birkenfeld, has already pleaded guilty in the US to tax evasion and fraud and is cooperating with federal prosecutors in Miami.

In a plea agreement, Birkenfeld detailed how he said he had been trained by UBS to help wealthy Americans evade taxes.

In one case, Birkenfeld told prosecutors he purchased diamonds using a US client's Swiss bank account and smuggled the diamonds into the United States in a toothpaste tube.

His former boss, Martin Liechti, head of UBS Wealth Management Americas International, was detained by authorities at the Miami airport in May. He is scheduled to testify at today's Senate hearing.

UBS is already under investigation by the IRS, the FBI, and the Securities and Exchange Commission, Levin said.

In a statement, UBS said it "has been working diligently with US and Swiss authorities" to provide information to US investigators.

The statement noted that information about tax fraud "is not protected by Swiss bank client confidentiality," suggesting it may turn over the names and account details of US citizens who had once been promised secrecy.

A UBS executive, Mark Branson, said the bank will no longer provide "undeclared" accounts to US citizens and is "winding down" its business involving already existing accounts.

"We now know that our program had failures and misconduct did occur," Branson said in describing what he said was a UBS internal review.

"We are committed to taking both corrective and disciplinary measures," the UBS executive said.

Levin said he was "skeptical' about claims from UBS and the Liechtenstein bank that they are changing their practices.

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