Another Swiss private bank under U.S. tax investigators' spotlight

ZURICH Wed Sep 11, 2013 1:17pm EDT

Related Topics

ZURICH (Reuters) - Private bank Rahn & Bodmer is under investigation by U.S. authorities, it said on Wednesday, following a recent deal to allow some Swiss banks to pay fines instead of facing prosecution for tax evasion by their U.S. customers.

That deal applies to about 100 second-tier Swiss banks, which may have to disclose information and face penalties of up to 50 percent of assets they manage for wealthy Americans.

A group of banks already under U.S. criminal investigation includes Credit Suisse, Julius Baer and state-backed regional bank Zuercher Kantonalbank. A second group of dozens more Swiss banks, which also helped wealthy Americans hide their assets, are not yet under formal investigation.

"We knew we would have to go to U.S. authorities, so we began to prepare the documentation concerning our U.S. business some months ago, believing we would be in the second group," said Rahn & Bodmer partner Christian Rahn.

"It is difficult to evaluate whether being in the first group of banks is better for us or not," he said.

The bank was informed last week that it was under investigation, Rahn said. A spokeswoman for the U.S. Justice Department declined to comment.

The bank will not need to set aside capital to meet regulatory requirements if it has to pay a fine, as it has provisions which will cover a potential payment, Rahn said.

Credit Suisse and Julius Baer said in July they were preparing information on client withdrawals demanded by U.S. investigators to help pinpoint tax evasion, which may have pointing the finger at other banks.

However, Rahn said he did not believe his bank was being investigated as a result of data passed on by other banks as it had stopped accepting undeclared U.S. assets in 2008 and advised clients with such assets to make voluntary disclosures to the U.S. authorities.

According to its website, the Zurich-based bank managed client assets of 12.5 billion Swiss francs ($13.4 billion) at the end of 2012. It employs about 200 people.

It is the oldest bank remaining in the German-speaking part of Switzerland after St. Gallen-based Wegelin shut its doors earlier this year following an indictment and fine by U.S. authorities for conspiring to help U.S. clients evade taxes.

UBS paid a fine of $780 million in 2009 and delivered the names of more than 4,000 clients to avoid indictment, giving the U.S. authorities the information that has enabled them to pursue other Swiss banks.

(Editing by Mark Potter and Louise Ireland)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (1)
AlkalineState wrote:
Another repository for holocaust jewelry and stolen Renaissance art…. under scrutiny.

Sep 11, 2013 12:02pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.