Swiss banking giant to pay giant fine

Banking giant UBS has agreed to pay $780 million US and turn over once-secret Swiss banking records to settle allegations it conspired to defraud the U.S. government of taxes owed by big clients.

As part of the deal struck in a federal court in Florida,  UBS took the unprecedented step of agreeing to immediately turn over to the U.S. government account information for U.S. customers of the bank's cross-border business.

According to U.S. officials, when an acquisition in 2000 of a U.S. company brought UBS a host of new, American clients, the bank set about to evade new reporting requirements for those clients. To do so, UBS executives helped U.S. taxpayers open new accounts in the names of sham entities.

Prosecutors contend that UBS executives used encrypted software and other counter-surveillance techniques to prevent anyone from detecting that they were actively marketing such Swiss bank secrecy, and tax evasion, to American taxpayers.

The clients, in turn, filed false tax returns that omitted the income they earned in their Swiss accounts, according to the court papers.