Formally the authorities of France are investigating UBS formally for helping the wealthy clients allegedly open the undeclared accounts there in Switzerland.
An official from prosecutor’s office in Paris told that Swiss bank happens to be suspected of the complicity in sales practices which are illegal.
Also, it allegedly did set up the shadow system of accounting which masked the transfers between Swiss and French bank accounts.
According to UBS, it was being cooperative with the authorities.
Being placed in official investigation under French law means that there is consistent or serious evidence to have a suspect implicated in crime. But that doesn’t necessarily leads up to any trial, according to an official.
The recent move follows the action taken against French unit of bank last week that was also placed formally under scrutiny with similar suspicions.
Patrick de Fayet, UBS France’s former head, along with 2 local executives of the branch already is under investigation.
The investigators are investigating whether the staff of UBS broke some French law that is against the illicit solicitation through approaching the potential clients actively in France.
Allegations did come to light originally after the former staff had blown whistle over practices which involved 100s of corporate and retail clients.
One anonymous letter got sent to central bank of French’s regulatory arm reportedly suggesting that there were parallel accounts opened within Switzerland though not declared in France that is illegal in the eyes of French law.
This letter said that special record happened to be kept between the year 2002 to 2007 that listed undeclared accounts which were opened by the corporate clients.
The former employees say that the UBS bankers mingled with the rich people regularly at musical concerts and sporting events including those sponsored by the UBS to seek the possible clients out for evading tax.
In an instance, one former marketing official in UBS French Branch sais that Swiss bankers did make trips on order to meet the prospects during events, including Roland Garros, tennis tournament.
According to Stephanie Gibaud, she was told to destroy series of documents which are sensitive containing names of potential or current clients who participated in the events that were organized on the French territory.
A former UBS banking division’s internal auditor, Nicolas Forissier, also told newspaper that one special record that contained list of clients, who were French, with bank accounts that were undeclared was sent in to the Swiss headquarters of UBS.
He told that France had to be milked and that UBS French branch was only the excuse for getting the clients for the bank’s Switzerland branch.
Magistrates who are investigating this affair are known to have sent to the Swiss authorities a list that contains names of three-fifty-three people who are suspected of holding Swiss account and detail is also requested regarding such accounts.
Along with latest investigation, it was identified that UBS is supervised witness over 2 other allegations that relate to tax evasion and money laundering.
Supervised status tends to be a status that is less serious than formal investigation. This mean a person has to be along with his lawyer if they are further questioned in investigation.
According to UBS, they would continue to work with French authorities within legal framework that is applicable to reach at some resolution regarding this matter.
It also said that probe is widened by the decision of tribunal and UBS would continue cooperating with French authorities. It further said that it wouldn’t allow any step targeted at helping the clients to do away with the fiscal duties.
Recent investigation came during wider crackdown by government over evading tax in US and Europe.
In France, the former French minister for budget, Jerome Cahuzac did resign in this April after he admitted that he squirreled away the savings in his undeclared account in Swiss bank. He also said that to tackle with tax evasion, it was his ministry that was responsible.
In 2008, UBS was to face a similar investigation in US when it was faced with charges for the conspiracy of defrauding tax authorities of US. The bank finally paid a fine of $780M to avoid the prosecution and also handed the data over on about 4,500 bank accounts that are held by the suspected tax evaders in US.
