- Switzerland's oldest private bank is to close after pleading guilty to helping US citizens evade taxes
- Wegelin is the first non-U.S. bank to plead guilty to a role in a tax evasion scheme
- Prosecutors say the bank created sham foundations and code names to disguise owners' identity
- The news comes as U.S. authorities investigate several Swiss banks, including Julius Baer and Credit Suisse
Wegelin, Switzerland's oldest private bank, is to close after pleading guilty to helping US citizens evade paying taxes on $1.2bn held in offshore accounts.
The bank, founded in 1741, agreed on Thursday to pay $57.8m in restitution and fines to US authorities in an admission that marked the first guilty plea by a non-US bank to a role in a tax evasion scheme.
In a statement on Thursday from its headquarters in the small Swiss town of St Gallen, Wegelin said: "Once the matter is finally concluded, Wegelin will cease to operate as a bank."
The bank last year sold the bulk of its business to Swiss co-operative lender Raiffeisen, prompting the effective disappearance of Wegelin.
News of the guilty plea comes as US authorities investigate several Swiss banks, including Julius Baer and Credit Suisse, for potentially helping Americans seeking to evade taxes.
Preet Bharara, US attorney for Manhattan, called the guilty plea a "watershed moment" in the government's effort to hold banks and individuals accountable for tax evasion.
To date, dozens of bankers and their clients have been charged with conspiring to evade taxes.
US authorities continue to follow leads developed from its 2009 landmark deal with UBS, when the bank admitted to helping US citizens avoid paying taxes, agreed to turn over thousands of client names, and paid $780m to end the criminal investigation. The Internal Revenue Service set up a voluntary disclosure programme that has resulted in more than 14,000 individuals reporting offshore accounts and unpaid taxes in exchange for leniency.
The US charged Wegelin in February, one week after the Raiffeisen deal -- which came two weeks after the Department of Justice charged three Wegelin bankers and implicated a managing partner in the alleged scheme.
Otto Bruderer, a managing partner of Wegelin, appeared in US court on Thursday to plead guilty on behalf of the bank. Mr Bruderer said from 2002 to 2010 the bank set up accounts for US taxpayers who did not complete W-9 tax disclosure forms.
"Wegelin intentionally opened and maintained non W-9 accounts for these taxpayers with the knowledge that, by doing so, Wegelin was assisting these taxpayers in violating their legal duties. Wegelin was aware that this conduct was wrong," Mr Bruderer said.
Prosecutors allege Wegelin bankers created sham foundations or code names, such as Elvis, for the accounts to disguise their owners' true identity, according to the indictment.
The bankers also allegedly took steps to win business from rival UBS after it was known that the bank was under investigation, authorities said.
The payment consists of $20m in restitution, $15.8m in forfeiture of fees the bank collected from clients, and a $22m fine, which must be approved by the judge. Wegelin previously forfeited $16m to the US.