R.T.Sakthidaran

On 1st July 2008, the Internal Revenue Services (IRS) of USA filed a case No.09-60033-CR-COHN against the largest bank of Switzerland, �UBS AG� (UBS) for the bank’s fraudulent activities in the US District Court, Southern District of Florida. USA accusing UBS on 42 types fraudulent activities violating 18 USC #371.

UBS wanted to avoid being brought on its knees and that might threaten the entire Swiss economy. (What would happen to Swiss and World economy if Government of India files similar cases against Swiss Banks for its $1456 billion assets!) On 19th February 2009, UBS signed a �Deferred Prosecution Agreement� with USA. The salient features are given below:

• Defendant only UBS not its employees, executives or American account holders.
• There are 20,000 secret accounts in UBS from American clients
• Total undeclared to IRS assets $20 billions
• The claim was for the period 2001-2008
• UBS will pay $780 million to USA at the following schedule of payment:
  • $200 million immediately
  • $115 million after 30 days
  • $ 40 million after 6 months
  • $180 million after 12 months
  • $245 million after 18 months
• IRS will request the court to defer the proceedings for 18 months
• If UBS complies with the agreement then IRS would seek dismissal of the case with in one month after 18 months from 19 February 2009.
• An exit program agreed by UBS
  • UBS to start measures to stop all illegal activities immediately
  • UBS to stop �cross border business operations� immediately
  • UBS to inform all its American clients to inform them withdraw their cash, documents and other valuables in the lockers to American Banks with in 45 days.
  • If the action is not taken, UBS to transfer them to banks already indicated by the clients or draw Swiss Govt. Bonds in their name and keep in safe custody.

• UBS to provide the details of those secret 20,000 accounts
• UBS agrees to request their clients to disclose voluntarily the secret assets to avoid interest, penalty and legal actions on the account holders.
• UBS to warn their clients that all these secret accounts would be closed within 45 days yet their records would be available for another 10 years to comply with Swiss Government Regulations.

What is next?

$20 billion is too small for USA compared with $1456 billion of India. There must be more assets in many other smaller banks. There are more than 700 banks in Switzerland engaged in similar activities. Will USA chase the other banks also? Will USA name Switzerland as �#1 – Economic Offender of the World� and help other countries to recover their hard earned money from them?

I am really sorry to realize that Switzerland is such a criminal country. I had enjoyed reading �Games People Play� by Eric Berne, appreciated its achievements in precision engineered products, cartography and many many things. Now, I feel Switzerland is no way better than terrorists, drug peddlers, sex traders or other criminals.

The people of Switzerland must ask their elected representatives to amend their constitution such that foreign nationals can open their account in Swiss Banks only after providing proof that they have complied with their countries rules and regulation. The UBS exposure is the first and there is going to more in future. The people of Switzerland must realize that such tainted money can not bring happiness, health or wealth in long term. Wake up before it is too late!!!

Jai Hind

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