150 UBS clients will be probed by the US prosecutors

In a filing on Tuesday with a federal court in Fort Lauderdale, Florida, U.S. prosecutors confirmed information that the United States is building criminal cases against more than 150 American clients of Swiss bank UBS as part of a crackdown on tax evasion now made easier by a deal over access to secret account information. Four American clients of UBS, three in Florida and one in California, are already being prosecuted on criminal charges. The number of criminal probes is widely expected to mushroom soon.

Moreover, the prosecutors requested a sharply reduced prison sentence for ex-UBS banker Bradley Birkenfeld, who had faced up to five years imprisonment after pleading guilty in June 2008 to helping a U.S. billionaire hide $200 million in assets from U.S. tax authorities. The prosecutors asked that Birkenfeld's sentence be cut to 2-1/2 years of imprisonment. In the same court filing, prosecutors said evidence provided by Birkenfeld, a key informant in the ongoing U.S. prosecutions of wealthy American clients of UBS, had been critical to uncovering a "multibillion-dollar scheme to defraud the United States" involving UBS bankers and their U.S. customers.

In his own separate court filing, Birkenfeld said he was the first known banker operating in Switzerland who sought to "peel back the curtain" of its bank secrecy laws. Besides, he said that his extensive cooperation with U.S. authorities, beginning as a whistle-blower in 2006, had reportedly led the United States to extend its inquiry into illicit activity by other foreign banks. Based largely on his information, UBS could have been forced to give the U.S. Internal Revenue Service the names of 19,000 U.S. clients suspected of tax evasion, he added.

As part of a "deferred prosecution agreement," UBS agreed in February to pay $780 million to settle charges that it had helped American clients evade taxes on about $20 billion concealed in offshore accounts. A U.S. legal source told Reuters on Monday that UBS was expected to give U.S. authorities the names of about 5,000 more Americans suspected of using the Swiss bank to evade taxes.

Birkenfeld, who was employed at UBS from 2001 to 2005 and served as a director of its private banking division, had many U.S. clients and acknowledged, when he pleaded guilty in June 2008, that he once smuggled a customer's diamonds into the United States in a toothpaste tube. He admitted helping clients set up sham entities to hold assets in offshore finance centers such as Switzerland, Panama, the British Virgin Islands, Hong Kong and Liechtenstein. In the court document filed through his attorney, Birkenfeld appealed for a sentence involving only probation, with any detention to be served at home.