Switzerland’s oldest bank, Wegelin & Company, did not get off to a good start in 2013. Representatives from the bank admitted in U.S. District Court to helping U.S customers avoid taxes by hiding over $1.2 billion in (supposedly) secret Swiss accounts. In addition to their guilty plea, the bank has agreed to pay $74 million in fines to the United States.

According to a story in the New York Times “From about 2002 through 2010, Wegelin agreed with certain U.S. taxpayers to evade the tax obligations of these U.S. taxpayer clients, who filed false tax returns with the I.R.S.” Otto Bruderer, another Wegelin partner, said in court. “Wegelin was aware the conduct was wrong.”

In a further wrinkle, prior to Wegelin’s indictment last February, the bank sold off their non- U.S accounts and closed up shop, a move that Judge Rakoff, denounced as a “fraud upon fraud.”

This case represents the first successful prosecution of a Swiss bank on tax evasion charges.  U.S. taxpayers who are depending on Swiss banks to keep their identities anonymous and their holdings secret may wish to seriously rethink this strategy.

Swiss Bank Pleads Guilty to Tax Law Violations

Are Secret Accounts and Offshore Havens Gone For Good?