UBS condemned to pay a record $ 5.1 billion in French taxes

The Paris Criminal Court ruled on Wednesday that UBS was illegally providing French clients with banking services to conceal assets from the tax authorities. The judge sentenced UBS to a fine of 3.7 billion euros and added an additional 800 million euros to the French government.

"The criminal acts were of exceptional gravity," said Judge Christine Mee. "These acts were committed under the veil of opacity."

For eight years, UBS has been handling the French investigation and the bad press. Before the trial last year, the lender had been accused of sending Swiss bankers in search of new customers even though they did not have the necessary paperwork to offer such services in France, and money laundering undeclared funds from their clients.

UBS said it would appeal the ruling, which would delay the need to make any payments until the higher courts have made their final decision.

"The bank has always challenged any criminal offense in this case throughout the investigation and the trial," UBS said in a statement. "The charges of laundering the proceeds of tax fraud are unfounded, the underlying offense of an initial tax evasion by French taxpayers not being proven."

Autumn actions

The Zurich bank's shares fell to 4.8%, their highest level since 22nd January.

UBS's French unit was also found guilty, along with five former bankers accused. A sixth banker, Raoul Weil, was authorized by the court.

"The concealment of assets and unpaid taxes have caused financial damage of an exceptional nature due to the longevity and size of the fraud," said Mee.

The UBS case is part of a French campaign to crack down on tax evasion via Switzerland, which resulted in the conviction of a former minister and a settlement of 300 million euros with HSBC Holdings Plc. However, the French financial prosecutors of the National Financial Procuratorate were the victims of two successive acquittals by art dealer Guy Wildenstein, accused of having concealed paintings worth hundreds of millions of dollars in paintings. offshore trusts to avoid taxes.

During the first three weeks of the trial, everything seemed to be going according to plan for UBS. The testimonies were consistent and favorable to the bank, with few bitter questions from judges or prosecutors. Then, in the middle of the trial, Mee began telling the accused that she had not bought their explanations and that her words were sarcastic. The judge cut off a UBS executive staff member for giving him a lesson and even shouted to UBS's lead counsel for arguing with a lawyer for the complainant during the accused's testimony.