FACTBOX-UBS faces Monday hearing in U.S. lawsuit
July 10 (Reuters) - UBS AG (UBSN.VX) (UBS.N) faces a hearing in federal court in Miami on Monday of a lawsuit in which U.S. authorities are seeking to access details on as many as 52,000 clients suspected of using the Swiss bank to dodge U.S. taxes.
The hearing is the first in the case, in which the U.S. Justice Department aims to crack open Switzerland's centuries-old and jealously-guarded tradition of bank secrecy:
-- UBS fell afoul of the Justice Department in 2007 when Bradley Birkenfeld, an American and former executive at the bank, told U.S. officials UBS had begun advising American customers in 2002 that it was not required to reveal their identities to the Internal Revenue Service.
-- Birkenfeld is due to be sentenced next month. He pleaded guilty in a Florida court in June 2008 to helping a billionaire hide $200 million in assets from the IRS. It was revealed at the time that Birkenfeld had once smuggled a U.S. client's diamonds into the United States in a toothpaste tube to avoid detection by the authorities.
-- U.S. prosecutors estimated last year that UBS was holding about $20 billion in assets for American clients in accounts hidden from U.S tax authorities. The so-called "undeclared business" accounts were estimated to produce about $200 million in annual revenues for the bank.
-- UBS, one of the world's largest banks, agreed in February to pay $780 million and identify 250 U.S. clients to settle criminal charges that it had helped rich Americans evade taxes.
-- The February agreement was hailed by U.S. authorities as the result of a prosecution that effectively pierced Swiss bank secrecy for the first time in history. U.S. authorities said they were still pursuing a civil lawsuit, however, as they pressed for details on up to 52,000 UBS clients.
-- Analysts estimate UBS could afford to pay up to $5.5 billion to settle the tax dispute out of court. Even if it were saddled with such a big payout, the bank would need no immediate cash injection due to a recent capital increase and asset sales, the analysts say.
-- Authorities say the United States loses about $100 billion every year because of people who use offshore tax schemes to evade their U.S. tax obligations. (Reporting by Thomas Brown, editing by Gerald E. McCormick)
