Swiss bank Wegelin braced for “expected” fight with US

ZURICH, SWITZERLAND – Wegelin Bank in St Gallen, possibly Switzerland’s oldest bank, made headlines back in August 2009 when it published a newsletter with the heading “Farewell America”, saying it was pulling out of the US and advising its clients to get out of US securities. This week the bank says it is prepared for a fight with the US: it confirmed to Reuters Wednesday that three of its employees, all working in Switzerland, have been charged by US authorities with helping US citizens avoid taxes by hiding their money in Switzerland.

“‘Although US law has some scope for interpretation in this case, Wegelin & Co is certain that Swiss law was not broken at any point,’” the bank is quoted by Reuters as saying in an e-mailed statement. “‘The accused employees worked for the bank within the borders of Switzerland.’”

The bank did not mince words in its criticism in 2009, on moral grounds, of the direction in which the US government is moving, noting in its August 24 Investors Newsletter lead article called “Farewell America” that “the next round of fiscal enforcement staged by the Americans will be devoted not to the American super-rich, but to non-Americans who never in their lives had any intention of evading taxes.”

The three bankers were charged in Manhattan with trying to “capture” business from UBS in 2008 and 2009 when it was famously investigated by the IRS. Switzerland’s largest bank later paid a fine of $780 million to the US.