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Money laundering for tax evasion: a fine of 2 billion required on appeal against UBS

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Two billion euros for a “slice of the history of UBS” synonymous with tax evasion: the general prosecutor requested, Monday, in Paris a heavy fine against the Swiss bank, judged on appeal for aggravated money laundering of tax evasion and illicit bank directing.

In an indictment with two votes, on the sixth day of hearing, the prosecution asked the court of appeal to confirm the guilt of the banking giant, sentenced in 2019 to a fine of 3.7 billion euros, the most heavy sentence never pronounced in France in a case of tax evasion.

Read also: UBS and its French subsidiary appeal proceedings open in Paris

Because between 2004 and 2012, there was at UBS “a great interest in collecting in abundance (money) by offering effective wealth management, but also the concealment of said wealth, or part of it , to the French tax authorities “, summarizes Advocate General Muriel Fusina.

Instructions for “chasing” new customers

While the bank was “neither approved nor authorized to canvass on French territory”, it is according to it “established” that Swiss salespeople went to France, during promotional events – receptions, concerts, golf tournaments – but also in UBS offices or in the homes of potential clients.

These salespeople came to “hunt” new clients, continues the magistrate, citing in particular statements by the former director of internal audit, Nicolas Forissier, as well as those of Stéphanie Gibaud, former marketing manager at UBS France, which informed investigations.

Muriel Fusina quotes internal instructions distributed to “charge d’affaires” – “an injunction to absolute discretion, not to say underground” – and “milk books”, which is for the prosecution an element of accounting parallel cross-border flows.

“The accounts of French tax evaders” knowingly managed

In the courtroom, night falls and the former executives, the representatives of the banks and their lawyers, who have reaffirmed throughout the trial to have “respected the law”, in turn shake their heads in denial. Around 8 p.m., an unexpected switch-off of the lights opened up a mocking parenthesis for the defendants.

The stakes are high for the global heavyweight in wealth management, which has already paid a deposit of 1.1 billion in this case.

Read more: Faced with UBS, a fragile financial floor

“UBS knowingly managed the accounts of French tax evaders,” continues the other attorney general, Serge Roques, who had already requested at first instance while he was at the National Financial Prosecutor’s Office (PNF). Poste restante (so as not to receive statements at home), numbered accounts, interposition of offshore companies in the Bahamas or Panama … the services offered by UBS, which fall under banking secrecy according to the defendants, were all “tools of ‘opacity’, argues the magistrate. Quoting a flurry of articles from the penal code, he then tackles the thorny calculation of the amount of the fine incurred.

Relying on a judgment of the Court of Cassation, subsequent to the first judgment, the defense maintains that this amount must be calculated on the basis of the taxes evaded and not of the total of the hidden funds – which could mean a significant reduction. of the penalty incurred.

A “narrow conception”, regrets Serge Roques, while “taking note” of this case law: starting from an estimate of 9.6 billion euros hidden, including 895 million in taxes evaded, the maximum amount now reached 2, 2 billion.

More damages required

The public prosecutor’s office requests confirmation of the sentence of 15 million euros in fine imposed by the court for UBS France, as well as those imposed on five former executives, who went up to 18 months in prison suspended and 300,000 euros fine. It also requires the conviction of the only defendant acquitted at first instance, the former number 3 of UBS AG.

About that: UBS, call time

Earlier in the day, the state lawyer, civil party, requested a billion euros in damages. At the end of the first trial, the parent company of UBS, its French subsidiary as well as three former executives were ordered to jointly pay 800 million euros to the State.

Me Xavier Normand-Bodard recalled that at the end of 2015, nearly 4,000 UBS clients had regularized themselves with the Bercy “sobering up” cell, for a total of 3.7 billion funds. These repentant taxpayers are now nearly 17,000.

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