Sen. Levin: Shut Down Giant Swiss Bank UBS

Investigation reveals secrecy tricks Swiss bankers allegedly used.

ByABC News
July 17, 2008, 10:59 AM

July 17, 2008— -- 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.