Swiss bank Wegelin to close after US tax evasion fine

Switzerland's oldest bank is to close permanently after pleading guilty in a New York court to helping Americans evade their taxes.

Wegelin, which was established in 1741, has also agreed to pay $57.8m (£36m; 44m euros) in fines to US authorities.

It said that once this was completed, it "will cease to operate as a bank".

The bank had admitted to allowing more than 100 American citizens to hide $1.2bn from the Internal Revenue Service for almost 10 years.

Wegelin, based in the small Swiss town of St Gallen, started in business 35 years before the US declaration of independence.

It becomes the first foreign bank to plead guilty to tax evasion charges in the US.

Other Swiss banks have in recent years moved to prevent US citizens from opening offshore accounts.

US Attorney Preet Bharara said: "The bank wilfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from US law enforcement."

It remains to be seen whether US authorities will continue with, or drop, parallel charges against three Wegelin bankers, Michael Berlinka, Urs Frei and Roger Keller.

The Wegelin case comes four years after a far larger Swiss bank, UBS, agreed to pay a $780m fine to US authorities related to tax evasion charges. UBS also agreed to reveal the details of US account holders.

However, UBS neither pleaded nor was found guilty. Instead it and US prosecutors came to what is called a deferred prosecution agreement, with the fine being paid in exchange for the charges being dropped.

Switzerland's other big bank, Credit Suisse, remains under investigation by the US authorities.