French court hits Swiss bank UBS with $5.1 billion penalty
Bar Associations
A French court ordered Switzerland’s largest bank, UBS, to pay 4.5 billion euros ($5.1 billion) in fines and damages for helping wealthy French clients evade tax authorities, sending a stern warning to tax dodgers and the banks that aid them.
The Paris court convicted Zurich-based UBS AG on Wednesday of aggravated money laundering of the proceeds of tax fraud and illegal bank soliciting, issuing what French media called a record fine.
UBS, one of the world’s largest wealth management banks, slammed the ruling and vowed to appeal. It denied criminal wrongdoing, saying in a statement that the conviction was based on “unfounded allegations of former employees.”
UBS suggested the ruling was based on prejudices in France — which is known for its high taxes — against Swiss tax practices. It insisted that the bank was only offering “legitimate and standard services under Swiss law that are also common in other jurisdictions.”
The Paris court disagreed, and ordered exceptional criminal fines of 3.7 billion euros ($4.2 billion) for UBS’ Swiss head office and 15 million euros ($17 million) for its French subsidiary, and civil damages of 800 million euros ($907 million). Five former UBS executives were also given fines and suspended prison sentences.
Investigators say the Swiss bank sent employees to solicit business from wealthy executives or athletes during sports or music events in France, urging them to place their money in Switzerland.
The assets illegally concealed by French clients in Switzerland in 2004-2012 allegedly amounted to some 10 billion euros ($10.75 billion).
French government attorney Xavier Normand Bodard called Wednesday’s verdict a “very important” ruling and suggested it could set a legal precedent for cases involving the laundering of proceeds of tax fraud.
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Nicholas C. Minshew - Minshew & Ahluwalia LLP
Nicholas C. Minshew, Attorney at Law, concentrates his practice in the area of Family Law including divorce, separation, child support, child custody, alimony, division of property, separation agreements, domestic violence, prenuptial agreements, and child support enforcement & modification. Mr. Minshew provides legal services to clients in Washington, D.C., and throughout Maryland, including Montgomery County, Frederick County, and Prince George’s County. Mr. Minshew obtained his Juris Doctorate degree from the American University, Washington College of Law in 2000, where he worked as an editor for the Administrative Law Review. After receiving his law degree, Mr. Minshew worked as an attorney for the global law firm of Morgan, Lewis & Bockius LLP, and for Leonard Street & Deinard LLP representing companies in Federal proceedings. During that time, Mr. Minshew redirected his focus to provide legal services directly to individuals and families.