UBS German Sites Searched as Tax Probes Return to Haunt Bank

Updated on
  • Searches connected to investigation of about 2,000 UBS clients
  • Swiss lender is cooperating with authorities, spokesman says

Prosecutors in Germany carried out searches in connection with an investigation of about 2,000 UBS Group AG clients on suspicion of tax fraud, extending a series of probes into its customers that stretch back at least five years.

The actions began Tuesday with around 130 investigators involved, prosecutors for the German city of Bochum said in an emailed statement. The search has been completed and no documents were seized, Andreas Kessler, a spokesman for UBS said. No employees of UBS Europe SE employee is currently under investigation, he added.

In 2012, raids involving around 100 UBS clients in Germany were carried out as part of a tax-evasion probe by Bochum prosecutors. In 2014, the bank paid about 302 million euros ($354 million) to authorities to settle the investigation. The Swiss bank has defended itself in tax-evasion cases across Europe as governments seek to track cash hidden in secret bank accounts.

In the most recent case, prosecutors said German UBS clients are suspected of failing to report taxable income on investments in Luxembourg accounts. Following a reorganization earlier this year, the bank folded its Luxembourg wealth-management subsidiary into UBS Europe S.E., based in Frankfurt. 

The world’s largest wealth manager has been trying to flush out non-tax compliant bank accounts across Europe since the end of bank secrecy protections in Switzerland forced clients to come clean. In France, UBS is going to trial in a tax-fraud case that could leave it open to a fine of as much as 4.9 billion euros from the French government. The bank, which posted a 1.1 billion-euro bond to cover any potential penalties three and a half years ago, is going to court after settlement talks with French authorities broke down over the size of the fine.

UBS was not the only Swiss bank under investigation in Germany for allegedly helping its citizens evade taxes. Credit Suisse Group AG and Julius Baer Group Ltd. settled in 2011 for 150 million euros and 50 million euros respectively.

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