The oldest Swiss bank will close its doors permanently after pleading guilty to helping Americans evade their taxes.

Wegelin & Co, founded in 1741, will pay $57.8m in fines and compensation to US authorities. It announced it would "cease to operate as a bank" once the matter was concluded.

In a New York court the bank admitted charges of conspiracy in helping more than 100 US taxpayers hide at least $1.2bn from the Internal Revenue Service for almost 10 years.

The BBC reported US Attorney Preet Bharara as saying: "The bank wilfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from US law enforcement."

He added that it was a "watershed moment in our efforts to hold to account both the individuals and the banks - wherever they may be in the world - who are engaging in unlawful conduct that deprives the US Treasury of billions of dollars of tax revenue".

Otto Bruderer, a managing partner at the bank, told the court "Wegelin was aware that this conduct was wrong".

He confessed Wegelin had agreed with certain US taxpayers from about 2002 to 2010 to "evade the US tax obligations of these US taxpayer clients, who filed false tax returns with the Internal Revenue Service".

Wegelin, based in the small Swiss town of St Gallen, is the first foreign bank to plead guilty to tax evasion charges in the US.

The bank's original European clients pre-date the American Revolution. It started in business 35 years before the US declaration of independence.

Wegelin was first indicted by US authorities in February last year. At the time it was declared a fugitive from justice when executives failed to appear in a US court.

The bank fought the charges, claiming it was bound by Switzerland's relaxed laws because it only had branches in the country.

The case comes four years after Swiss bank, UBS, coughed up a $780m fine to US authorities and agreed to turn over the names of 4,450 clients following tax evasion charges.

UBS neither pleaded nor was found guilty. It agreed to paying the fine in exchange for the charges being dropped.

RD

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