Superseding Indictment Filed in Wegelin & Co Bank Case


Posted on May 22, 2015 |

Wegelin & Co. was indicted in 2012, along with three of its client advisors, Urs Frei, Michael Berlinka, and Roger Keller. Recently, in February of 2015, the U.S. government filed a superseding indictment. Wegelin & Co. was removed from the indictment because the bank has pled guilty, paid $74 million in fines and ceased operations. 

Additionally, charges were limited against Keller, who has been arrested in Germany and is awaiting extradition. No change was made to the charges against the other two client advisors.

The case against Wegelin, as well as the client advisors, is one of many that has been brought by U.S. authorities in an effort to crack down on foreign banks and foreign bankers who authorities believe helped to facilitate tax invasion. These types of actions not only have consequences for the financial institution and financial professionals who have been indicted but also for investors who need to be wary of bankers turning over client information in order to reduce their own prison sentences.

With each indictment handed down, the U.S. government gets closer to putting a permanent end to the ability to avoid taxes on money kept offshore.  Authorities are also going after individual investors and if you have undeclared offshore accounts, you should strongly consider speaking with a New Jersey tax evasion lawyer as soon as possible.

Legal Actions Continue Based on Wegelin & Co Tax Evasion Allegations

Wegelin was founded in 1741 and was an old and well-respected Swiss banking institution before it faced legal trouble with U.S. authorities. The government alleged that Wegelin had violated United States law by helping investors to evade their IRS tax obligations. When the Department of Justice filed charges against Wegelin, it was the first time that the U.S. government had pressed criminal charges against a foreign bank for violating U.S. tax laws.

Wegelin ended up paying around $74 million total in restitution and in fines.  The bank faced these penalties for helping U.S. clients hide more than $1.2 billion in secret foreign accounts that were not reported to the IRS. When the bank came under investigation, it sold off core businesses to protect its non-U.S. customers. The institution closed for good in 2013.

When Wegelin was indicted, the three advisors were indicted as well based on conspiracy to commit tax evasion. Authorities alleged that the financial advisors had used a website to solicit UBS clients and other U.S. investors to hide their money in secret offshore accounts.  The advisors face potential criminal penalties for this alleged involvement in helping U.S. investors to hide funds.

When banks and bankers have been charged with crimes in the past, many have turned over  information on account holders to U.S. authorities as part of plea agreements. Investors should be aware that this is a real risk and should consider what options they may have for coming forward to the IRS before their accounts come to the attention of authorities. 

A well-versed lawyer can help you to determine if you are eligible for Offshore Voluntary Disclosure Programs (OVDP) or other programs that can limit possible penalties for having undeclared money offshore. Contact Kevin Thorn at Thorn Legal Group today to discuss the facts of your case.


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