Opinion ID: 2672668
Heading Depth: 2
Heading Rank: 2

Heading: The Tax Fraud

Text: Plaintiffs also allege that UBS made materially misleading statements regarding an alleged scheme in which UBS Swiss bankers traveled in and out of the United States to illegally advise American clients on the purchase of investments.9 Specifically, in May 2008, following the indictment of certain UBS employees in connection 9 UBS’s Global Wealth Management & Business Banking contained a division called “Wealth Management International & Switzerland” (“WMI”), which catered mostly to affluent individuals overseas. Within WMI was UBS’s Swiss‐based cross‐ border private banking business. Through this banking business, UBS allegedly breached the terms of a 2001 Qualified Intermediary Agreement with the IRS, requiring UBS to disclose the identity of and/or withhold income taxes for American clients who traded in United States securities or had United States‐sourced income. 9 No. 12‐4355‐cv with the tax scheme, UBS made two disclosures, which revealed that the United States Department of Justice (“DOJ”) and the Securities and Exchange Commission (“SEC”) were investigating UBS’s conduct with regard to the cross‐border services it provided to American clients between 2001 and 2007.10 On February 19, 2009, UBS entered into a Deferred Prosecution Agreement11 with the DOJ and the Internal Revenue Service (“IRS”), which revealed that UBS had violated United States tax laws, and disclosed that UBS had paid a $780 million fine and admitted participation in a conspiracy to defraud the IRS.