MIAMI (AP) — U.S. prosecutors on Friday dismissed the criminal tax evasion case against Swiss bank UBS AG, effectively taking the bank off probation after it paid a huge fine and agreed to turn over names of thousands of suspected tax cheats.
“Given that UBS AG has fully complied with all of its obligations … the United States believes that dismissal is appropriate under the circumstances,” said the U.S. document filed by Assistant U.S. Attorney Jeffrey Neiman and other prosecutors.
The filing formally drops tax evasion conspiracy charges lodged against UBS in February 2009. When the charges were filed, UBS and U.S. officials announced a deferred prosecution deal in which the case would be dismissed after 18 months if the bank met several conditions and paid a $780 million fine.
Those other conditions included halting the bank’s illegal “cross-border” business in the U.S., relinquishing formerly secret identities of wealthy Americans suspected of dodging taxes and cooperating with investigators looking into tax evasion using offshore accounts.
The criminal case was the linchpin of a broad U.S. offensive against UBS that cracked the centuries-old Swiss tradition of banking secrecy. It led to a landmark agreement in a related civil case in which UBS is divulging names of more than 4,450 potential tax evaders who could face prosecution in the U.S.
At least 10 people have been prosecuted so far, with the Justice Department saying dozens more are under investigation.
The Swiss government said in August it had handed more than 2,000 of the names over to the Internal Revenue Service. Fulfillment of the agreement, which came in June, was delayed by a Swiss court decision and parliamentarians angry that the deal undermined Switzerland’s strict banking secrecy rules.
In addition, the mere threat of prison or fines led some 14,700 U.S. taxpayers to voluntarily come forward, avoid criminal charges and pay what they owe under an IRS amnesty program. Those taxpayers had offshore accounts in 70 countries, according to the IRS.
A UBS spokeswoman had no comment.