UBS Is Closing Down Accounts

Retrieving the checks from Switzerland could entail such pitfalls as going through customs, the lawyer said. In insisting that clients go to such lengths, UBS might be trying to avoid mail or wire fraud, the lawyer said.

UBS spokesman Mark Arena declined to comment on such details.

Arena said UBS is closing all Swiss-based accounts owned by private clients domiciled in the United States. A Senate report earlier this year estimated there were about 20,000 of those with about $18 billion on deposit.

If the clients want to stay with UBS, they must move their money to one of the bank's units that is regulated by the United States and transparent to the IRS, Arena said.

"Clearly, if the depositors have to move their money, no matter what they do with it they're going to leave tracks, and tracks are not consistent with bank secrecy," said lawyer Edward M. Robbins Jr. of the firm Hochman, Salkin, Rettig, Toscher & Perez. "If you were to park it in another secret account . . . that would not look good in a criminal tax prosecution," Robbins said. "On the other hand, if you bring all the money back to the U.S., you'll set off all sorts of bells and alarms in the banking system," Robbins said.

UBS has been under pressure from the U.S. government since June, when a former UBS banker named Bradley Birkenfeld pleaded guilty to helping an American real estate developer hide $200 million of assets and evade $7.2 million of taxes. Birkenfeld has been cooperating with U.S authorities in a widening investigation that led to the federal indictment of one of UBS's top executives.

The indictment by a grand jury in Florida, which was unsealed this week, accused executive Raoul Weil of conspiring with a host of others at the bank to market Swiss bank secrecy to American clients and help them dodge taxes. A lawyer for Weil denied the charges and said he would seek vindication. Meanwhile, UBS has given U.S. authorities the names of about 70 clients who wired money from UBS accounts in the United States to UBS accounts in Switzerland.

UBS announced in July that it was getting out of the business of offering Swiss accounts to American clients.

Some clients feel hung out to dry. "They're not happy," said lawyer Bryan C. Skarlatos of the firm Kostelanetz & Fink. "They feel like UBS is taking steps to protect itself."

U.S. lawyers say they have generally been advising clients with tax violations to consider seeking leniency through voluntary disclosures to the IRS. For clients who used secret accounts to hide the proceeds of crimes, however, solving the problem won't be that simple, lawyers said.