PARIS • Swiss banking giant UBS will go on trial in France for establishing a wide-ranging tax fraud scheme worth billions of euros, according to legal sources.
UBS will be charged with illegal banking practices and dissimulating tax fraud, the sources told Agence France-Presse yesterday, adding UBS' French subsidiary will also go on trial for complicity.
Five UBS top managers are also facing trial, including Raoul Weil, the former third-in-command at UBS. The French subsidiary's former No. 2, Patrick de Fayet, has entered a plea bargain procedure, they said.
France opened a probe into UBS after former employees blew the whistle over the bank's alleged system of setting up dual bookkeeping to hide the movement of capital into Switzerland between 2004 and 2012.
The bank's staff allegedly approached French clients, from wealthy businessmen to sports stars, during receptions, golf tournaments and concerts to convince them to hide their money in Switzerland.
In total, at least €9.76 billion (S$14.7 billion) was kept from the French tax man, according to the national financial crimes unit.
The amount that was kept from the French tax man, according to the national financial crimes unit.
The maximum amount UBS could face in fines.
In June last year, French prosecutors recommended that UBS face trial for "aggravated laundering of tax fraud proceeds" while its French branch be judged for complicity in these crimes.
UBS has always denied any wrongdoing, saying there was no proof for its implication in any such alleged scheme. Yesterday, a bank spokesman said UBS rejected both "the allegations and the nature of the charges brought".
The trial will offer the bank "the possibility of responding to the accusations brought against it", the spokesman said, adding that UBS was hoping for a "fair trial".
The total fine slapped on UBS could amount to up to half the sums laundered, according to French law. If investigators are right in their estimates, that would mean a fine of up to nearly €5 billion.
The bank had already posted a €1.1 billion bond imposed by French judges in 2014 which is regarded as an initial payment for any potential penalties.
AGENCE FRANCE-PRESSE, BLOOMBERG