'Wolf of Wall Street' Swiss Bank Pays $188 Million in Tax Case

The Swiss bank used by the former stockbroker known as "the Wolf of Wall Street" agreed to pay almost $188 million to avoid prosecution for helping U.S. clients avoid taxes.

Union Bancaire Privee helped hide assets from the IRS by letting two U.S. clients withdraw untraceable gold bars valued at more than $50 million, according to a non-prosecution agreement released Wednesday by the Justice Department. That would be more than a ton of gold at current prices.

The accord is the second-largest penalty secured by the United States since March under a disclosure program that requires Swiss firms to say how they helped Americans cheat and where their money went. In 76 accords, the banks have paid $1.3 billion.

The Geneva-based bank signed a statement of facts that detailed misconduct stretching back decades, saying it helped U.S. clients hide accounts and their assets from the IRS. Between 2008 and 2013, the bank managed 2,919 U.S. accounts with as much as $4.9 billion in assets.

"Under the terms of the agreement, UBP pays a heavy price for its criminal conduct," said acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department's Tax Division.

Since securing $211 million from BSI SA last March, the U.S. has settled with dozens of banks. The payments have escalated in recent weeks. Since Dec. 15, Credit Agricole (Suisse) SA agreed to pay $99.2 million; Bank Lombard Odier & Co. Ltd. paid $99.8 million; and Bank J. Safra Sarasin AG paid $85.8 million.

UBP will pay the penalty using money set aside in an earlier provision and an allocation of part of its 2015 profit, the bank said in an e-mailed statement. "The resolution has no effect on the Tier 1 ratio of UBP, which remains one of the most well-capitalized banks in Switzerland," it said.

Former stockbroker Jordan Belfort, who spent 22 months in jail for money laundering and securities fraud in the 1990s, used UBP to help hide money, according to his memoir, The Wolf of Wall Street. That story was retold in the 2013 blockbuster film starring Leonardo DiCaprio.