UBS Trial Delayed Again; U.S., Swiss Seek Settlement
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Saturday, August 8, 2009
The trial in the U.S. government's landmark challenge to Swiss bank secrecy was postponed Friday for a third time as the United States and Switzerland continue to pursue a negotiated settlement.
The action came one week after the Justice Department declared that the two sides were on the verge of a deal and aimed to have a final deal by Friday.
The government has been seeking a federal court order compelling Switzerland's largest bank, UBS, to turn over the names of Americans suspected of using 52,000 secret accounts to dodge taxes. The government has been fighting to recapture lost tax revenue, punish tax evaders, and deter others hiding money overseas.
Switzerland has resisted the U.S. demand, vowing that it would block UBS from complying even if a U.S. court ordered the disclosure.
Switzerland has been fighting to preserve the reputation for secrecy that has helped make banks there a magnet for global deposits and a major source of Swiss wealth.
Though the two sides have staked out what seem to be irreconcilable positions, a Justice Department lawyer last week told the judge presiding over the case that they had reached "an agreement in principle on the major issues."
In an update Friday for Judge Alan S. Gold, Justice Department lawyer Stuart D. Gibson said, "There are still some issues that remain to be resolved."
"The parties are working through these issues and plan to continue talking," Gibson added.
The judge scheduled another update for Aug. 12 and postponed until Aug. 17 the trial that was provisionally scheduled to begin Monday in a Miami court.
UBS admitted in February that it schemed to defraud the United States by helping American clients hide money from the Internal Revenue Service. To avoid a potentially devastating criminal indictment of the firm, it also agreed to pay $780 million. But it gave up only 200 to 300 of the tens of thousands of client names the United States was seeking, on the grounds that those relative few forfeited protection by allegedly crossing a line in Swiss law between simple tax evasion and outright fraud.
