US probes Rahn & Bodmer in dispute over tax evasion

SWISS private bank Rahn & Bodmer said yesterday that it is under investigation by US authorities, the latest bank to be targeted in a lengthy tax evasion dispute.

The Zurich-based bank, set up as a silk trader in 1750, has come under investigation despite a recent Swiss-US deal to allow some Swiss banks to pay fines to avoid or defer prosecution over tax evasion by their US customers. That deal was a step forward in a long-running US drive to pierce the shroud of Swiss bank secrecy and applies to about 100 secondtier Swiss banks, which could have to disclose information and face penalties of up to 50% of assets they managed on behalf of wealthy Americans.

But the agreement did not cover a first group of banks already under US criminal investigation, including Credit Suisse, Julius Baer and state-backed regional bank Zuercher Kantonalbank.

UBS paid a fine of $780m in 2009 and handed over the names of more than 4,000 clients in order to avoid indictment, giving the US authorities the information that has enabled them to pursue other Swiss banks.

Rahn & Bodmer partner Christian Rahn said the bank was informed last week that it was under investigation. It will not need to set aside capital to meet regulatory requirements if it has to pay a fine, as it has provisions which will cover a potential payment to the US, he said.

Credit Suisse and Julius Baer said in July that they were preparing information on client withdrawals demanded by US investigators to help pinpoint tax evasion, which may have named other banks.

Mr Rahn said the bank had stopped accepting undeclared US assets in 2008 and that it had “advised clients with such assets to make voluntary disclosures to the US authorities”.

The bank was established in 1750, and at the end of last year it managed client assets of Sf12.5bn ($13.4bn). It employs about 200 people.