UBS France under investigation in tax evasion case

PARIS (AP) -- French authorities are formally investigating whether UBS France helped rich clients evade the country's tax authorities, the Paris prosecutor's office said Monday.

Spokeswoman Agnes Thibault-Lecuivre said that the subsidiary of the Swiss bank is being investigated for complicity in illegal business dealings. Three executives at the French subsidiary are already under investigation.

UBS said it had been expecting this step as part of the ongoing investigation and is fully cooperating with French authorities. It denied any wrongdoing, saying it complies fully with French law.

France is one of many countries — all under pressure to scrounge up extra cash as they tighten their budgets — that is raising the pressure on tax evaders and avoiders. The European Union is leading a charge to crack down on secret accounts that hide money from governments, and the Group of 20 leading industrial and developing nations has pledged to rein in tax avoidance by multinational companies.

Switzerland's banks, known for their secrecy, have long been suspected of being used to hide money from tax authorities. The Alpine country has been pressured in recent years, however, into negotiating some tax treaties with the U.S., Germany and others.

UBS, in particular, has already been in the spotlight this year as one of the banks where France's then-budget minister hid funds from tax authorities. Jerome Cahuzac, who stepped down amid the scandal, confessed earlier this year that he hid hundreds of thousands of euros in Swiss and Singaporean banks for decades.

In 2009, UBS paid $780 million to U.S. authorities as part of deal to end a tax evasion probe in which it stood accused of helping Americans hide billions of dollars in secret accounts.

The bank was also the subject of a book published last year — allegedly based on accounts of disgruntled former employees — that accused the bank of systematically helping French customers dodge taxes. The bank has flatly denied the allegations in the book "Ces 600 milliards qui manquent a la France" — "The 600 billion missing from France."

But the book appears to have sparked — or perhaps spurred on — the investigation in France. The UBS executives were put under formal investigation shortly after it came out last spring.