Eighteen months after admitting to fraud and conspiracy, and paying a $780 million fine, UBS is today free of federal criminal charges.  Federal prosecutors dropped criminal charges against UBS AG, saying the bank had gotten out of the business of selling offshore private banking services that enabled wealthy Americans to avoid billions in taxes.  As part of the deferred prosecution  agreement, UBS avoided indictment and accepted probation while it satisfied prosecutors that it had dismantled offshore banking operations. 

UBS also agreed in August 2009 to turn over 4,450 names of American clients suspected of evading taxes, a watershed in the history of Swiss private banking. 

But the motion also said that UBS was continuing to cooperate with government prosecutors, though it did not provide specifics. 

UBS reportedly also notified prosecutors recently that it was no longer selling undeclared offshore private banking services to Americans through Singapore and Hong Kong, 2 tax havens where the bank has large operations.  The notifications came after prosecutors raised questions about UBS’s activities in Asia.  The issue of Asian hubs being used to hide American clients’ assets from the IRS came to light after UBS entered into its deferred prosecution agreement, in February 2009.  Since then, prosecutors have opened criminal cases against nearly a dozen former UBS clients, some of whose money UBS had routed through entities in the 2 Asian havens.

The government’s move to drop its federal case also came after 2 independent authorities - accounting firm KPMG, law firm Murphy & McGonigle - conducted reviews, at UBS’s behest, of the dismantling of the bank’s undeclared offshore private banking business.  [NYTimes, 10/23]