A French court has fined the Swiss multinational investment bank, UBS Group AG, US$3.7 billion for its part in various tax evasion and tax fraud cases of several French nationals. The bank was charged with illegally helping its French clients launder and hide billions of dollars from tax collectors for close to a decade.
The court in Paris also ordered the Swiss bank, currently based in Basel, to pay a US$800 million fine to the French state. According to reports, the bank allegedly allowed its clients to deposit billions of dollars into private accounts that were not accessible to French tax authorities. The courts also accused the bank of intentionally approaching French clients and offering them their services as a way of avoiding paying taxes to the state.
French prosecutors described the bank's actions as "systematic," in the way it had supported its tax-evading customers. The bank also allegedly conducted these activities in such a large scale that resulted in billions of dollars of lost tax money. Prosecutors also presented evidence that seemingly proved that UBS was sending out its bankers and marketers to solicit French clients at high-profile events such as big concerts and sporting events.
UBS has released a statement in response to the conviction, mentioning that it was denying any criminal wrongdoing and that it was prepared to file an appeal against the verdict. The bank stated that the conviction itself was baseless and lacked any concrete evidence.
The bank's statement also indicated that there was no evidence of any of its employees soliciting French nationals on French soil to open an account with them in Switzerland. Some of the evidence that was presented by prosecutors involved statements from former employees, which UBS pointed out were not present during the trails.
In its recent earnings call, UBS revealed that it had earned around US$4.9 billion in 2018. The bank reportedly has set aside US$2.46 billion to cover any potential losses that it will incur from lawsuits and other legal action against it this year. In 2009, UBS paid a settlement of US$780 million dollars in a case filed in the United States. A few years later in 2014, the bank paid a US$300 million fine in Germany.
The French government has been investigating the bank for over seven years, particularly tracking French tax evaders dealing with them between 2004 and 2012. Courts initially offered a settlement that would require the bank to pay a fine of US$1.1 billion. UBS rejected the settlement.
