French prosecutors have accused UBS France, its Swiss headquarters and French and Swiss bankers of orchestrating a vast cross-border system of “tax fraud money laundering”, according to a 126-page prosecution summary seen by the Swiss newspaper Le Temps.
The prosecution case, handed in by the French National Financial Prosecutor on June 24, accuses UBS of “illicit financial and banking sales practices” and “aggravated laundering of tax fraud”, the French-speaking paper said on Tuesday on its front page.
French judicial authorities’ have been investigating UBS since April 12, 2012 on suspicion of helping its wealthy clients avoid tax. It is alleged the bank illegally sold products designed to avoid French taxes. The bank was put under formal investigation for alleged complicity in suspected illegal sales practices in 2013.
In the allegations seen by the newspaper, the National Financial Prosecutor asks for UBS France, UBS Switzerland and six former bankers – three in France and three in Switzerland – to face trial.
Investigative judges must now rule on whether a trial will go ahead – possibly spring 2017, according to Le Temps - or the case be cancelled.
‘Hunters’, pseudonyms and golf
France opened a probe into UBS after former employees blew the whistle over the bank's alleged system of setting up dual accounts to hide the movement of capital into Switzerland between 2004 and 2012.
On the basis of numerous witness interviews, the prosecutors claim that “a systematic” and “large-scale” system was set up to launder money hidden by French tax-payers from the tax authorities.
The prosecutors accuse UBS Switzerland of carrying out illegal sales practices in Paris, Lille, Bordeaux and Strasbourg. With or without the help of French colleagues, Swiss client advisers, who didn’t have the necessary authorisation, used business cards without logos and organised meetings in hotels to convince rich French residents to place their assets in Switzerland, whether the assets were declared or undeclared, the newspaper wrote citing the allegations.
The bank’s employees also allegedly approached French clients, from wealthy businessmen to sports stars, during receptions, golf tournaments or concerts, to convince them to hide their money in Switzerland. Client consultants were referred to as “hunters” and wealth managers as “farmers”, with clients given pseudonyms like “friend of the Ritz”, Le Temps wrote.
UBS is accused of using a double accounting method to hide the movement of illicit funds between the two countries.
The prosecutor’s office claims it has collected sufficient proof to show “the existence not only of synergies between UBS AG (Switzerland) and its French branch, but also a system of cross-border cooperation which bears witness to the setting up of a systematic policy of collecting assets from French tax paying residents and bringing them to Switzerland”.
UBS denies the accusations, arguing that its involvement in such financial operations has not been proven. It has previously criticised the investigation for being “highly politicised”.
French judges evaluate the assets of French clients held by the Swiss bank at nearly €13 billion ($13.5 billion), of which 80% were undeclared, the paper said. Le Temps says that UBS claims these figures are not credible. The bank was forced to pay a €1.1 billion ($1.07 billion) bond to cover potential fines in 2014 when formal investigations began. UBS continues to fight against the “excessive” bail requirement.