Swiss bank Pictet gave data to U.S. in tax probe

Reuters, ZURICH, Sun May 6, 2012

(Reuters) - Swiss bank Pictet said on Sunday it handed over bank account details to U.S. authorities probing cases of tax evasion, as a newspaper reported it had accepted funds from two former UBS (UBSN.VX) clients suspected of having cheated on taxes.

Pictet said in a statement the data handover took place in November 2010 via the Swiss tax office, which had received a request for assistance from its U.S. counterparts.

This is the latest episode in an ongoing dispute between the United States and Switzerland over wealthy Americans accused of avoiding taxes by hiding money in secret Swiss accounts.

Eleven Swiss banks - including Credit Suisse (CSGN.VX) and Julius Baer (BAER.VX) but not Pictet - are under scrutiny by the United States for aiding U.S. citizens suspected of tax dodging.

Banking secrecy has helped the Swiss build up a $2 trillion offshore wealth management industry.

Citing 130 pages of court documents, the SonntagsZeitung said that two U.S. citizens transferred more than $2 million to accounts at the private bank Pictet, registered under the names of two front companies in Switzerland, at a time when UBS was under scrutiny by U.S. authorities investigating tax evasion.

The article, which was also carried in the French-language Le Matin Dimanche, did not say whether the U.S. authorities might take action against Pictet.

In its statement, Pictet did not say from which bank it had received a money transfer or how much it was. The Geneva-based bank said it closed the accounts in 2010.

Pictet said it was not being accused of breaking U.S. law.

"Moreover, we vigorously refute any allegation that Pictet is being targeted by the U.S. tax authorities," it said, adding there had been no subsequent data handovers after November 2010.

"The affair referred to in the Sunday newspapers was handled in full compliance with US and Swiss legal requirements," it said.

Finance Ministry spokesman Roland Meier declined to comment on the report.

The investigation into the 11 Swiss banks was fed by data culled in a crackdown on UBS, which that bank settled in 2009 by handing over thousands of client data, paying a fine and admitting wrong-doing.

In a related interview with the SonntagsZeitung, Patrick Odier, president of the Swiss Bankers Association, said another case like that of Wegelin & Co. could not be ruled out.

Wegelin, Switzerland's oldest bank, buckled under the pressure of a long-running campaign by U.S. tax authorities and broke itself up in January. Wegelin had accepted money from UBS clients suspected of dodging tax.

"U.S. authorities could have enough material to weigh on banks other than those on the 11-bank list," Odier said.

Switzerland is trying to get investigations into 11 banks dropped in return for the payment of fines and the transfer of U.S. client names. It is also seeking a deal to shield the remainder of its 300 or so banks from U.S. prosecution.

Swiss Finance Minister Eveline Widmer-Schlumpf has said she hoped for a deal before the end of the year.

"We need to draw a line under it, so there are no more charges," Odier said.

Odier also said he did not know how high any fines would be, but that any money due would be divided up amongst the Swiss banks based on the size of their U.S. client base.

Switzerland has also been locked in a similar tax dispute with Germany. The two countries last year agreed to tax secret offshore accounts but are still arguing over whether the deal is too lenient or not.

"Switzerland has made many concessions to Germany," Odier was quoted as saying. "More is not possible."

(Reporting by Catherine Bosley; Editing by Hans-Juergen Peters)

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