By Haig Simonian in Zurich
Published: February 23 2009 02:00
Financial Times
UBS's problems with the US authorities spring from the bank's operations in Geneva, Zurich and Lugano, where 60-70 private bankers catered to the needs of wealthy US clients with accounts in Switzerland.
Such business with US holders of "offshore" accounts had been conducted for decades. As with other Swiss private banks, UBS argued it was not responsible for policing whether customers had declared their holdings to their relevant domestic tax authority - in the US case, the Internal Revenue Service.
In published testimony, Bradley Birkenfeld, the former Geneva-based UBS private banker who has co-operated with the US Department of Justice, revealed, for example, how he squeezed diamonds into tubes of toothpaste to help a key client transfer assets without detection.
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