A French judge grew weary on the fourth week of a high-profile trial of UBS Group AG’s repeated attacks on the credibility of witnesses and its insistence that it had no knowledge about clients evading taxes.
Top UBS France executives last week took aim at two whistle-blowers who helped trigger probes into the bank, saying one had “lied” and accused the other of “blackmail.” A lawyer for UBS had also sought to discredit a former employee who told investigators that as much as 99 percent of the money French clients deposited in Switzerland was undeclared, pointing out that he’s been convicted of embezzlement.
“There was maybe a quite serious hiring problem at UBS around that time,” Judge Christine Mee said Monday, taking a more fiery stance than in the previous three weeks of the trial. The remark came after Alain Robert, UBS’s vice chairman of wealth management, tried to question the credibility of the whistle-blowers.
The UBS case is part of a French crackdown on tax fraud conducted via Switzerland that’s seen the conviction of a former minister and a 300 million-euro ($341 million) settlement with HSBC Holdings Plc. France is seeking 1.6 billion euros in compensation from Zurich-based UBS in the case and the bank could face billions of euros more in fines.
The trial is focusing on allegations UBS provided numbered accounts and set up trusts to launder money French clients hadn’t told tax authorities about.
Robert refuted claims made by the witnesses that it was well-known inside the bank that the vast majority of French clients didn’t declare money they had in Switzerland. The UBS executive told the court that he has “no information” about French clients who cheated on their taxes.
“It’s not the bank’s problem” to verify whether clients have paid their taxes, Robert said. “It’s up to the client, not the bank, to take responsibility vis-a-vis tax authorities.”
