From The Wall Street Journal:
UBS AG is under legal pressure as U.S. prosecutors expand their investigation into whether the Swiss bank helped tens of thousands of Americans avoid paying taxes, said several people involved in the case.
U.S. tax investigators believe the number of American clients that UBS helped to avoid taxes could be much higher than the previously disclosed estimate of about 17,000, these people said. The people said investigators are also looking into whether other parts of the bank besides the wealth-management unit were involved in helping clients avoid U.S. taxes.
The bank is in a round of talks with the Justice Department to avert a possible felony indictment by admitting to criminal conduct and paying a penalty in the range of $1.2 billion, these people said.
UBS has publicly denied any wrongdoing, and a bank spokesman said the bank "does not comment on...speculative matters." A Justice Department representative also declined to comment.
New UBS Chairman Peter Kurer has indicated that striking a deal with U.S. prosecutors is a top priority. In a Jan. 15 presentation for investors, he said goals for 2009 include a "DOJ settlement" and a "recovery of UBS's reputation."
UBS became the focus of U.S. criminal and civil probes into alleged offshore tax evasion in 2007, when a former UBS executive told U.S. officials that the bank allegedly began telling American customers in 2002 that it wasn't required to disclose their identities to the Internal Revenue Service.
Prosecutors in Florida have indicted one former high-level UBS executive on charges of helping Americans evade taxes and have detained a second executive as a material witness; Bradley Birkenfeld, the former UBS executive who tipped off U.S. officials, has pleaded guilty to the same charge and is helping the IRS and the Justice Department.
In the civil case, the Justice Department and the Internal Revenue Service are discussing whether to ask a federal judge for a new order to force the bank to turn over the names of its American account holders, people involved in the case said.
