Wegelin & Co., founded in 1741 as the oldest Swiss bank, will close its doors forever after admitting to helping wealthy Americans commit illegal tax evasion.Though this bank has no branches outside of Switzerland, the U.S. government has been instrumental in facilitating its demise. That’s because from 2002 to around 2010, Wegelin harbored at least $1.2 billion that would have otherwise been owed to the IRS.
Otto Bruderer, a managing partner at Wegelin, admitted in court that the bank “was aware that this conduct was wrong.”
As part of the guilty plea, the settlement calls for Wegelin to pay approximately $36 million to the IRS as well as a $22 million fine. Thing is, that nearly $60 million scheduled to be paid in fines and restitution pales in comparison to the bank’s hoardings of $1.2 billion over the eight-year period.
And these penalties have to be approved by U.S. District Judge Jed Rakoff – and that’s far from a sure bet. He’s shown his willingness to reject settlements that let bankers off with a slap on the wrist – a financial fine but no admittance of guilt.
And he won’t allow this issue to be settled in a manner he perceives to be “unfair, unreasonable, inadequate, or in contravention of the public interest.”
A sentencing hearing will take place on March 4.