WEGELIN & Co., the oldest Swiss private bank, was declared a fugitive after failing to show up in a U.S. court to answer a criminal charge that it conspired to help wealthy Americans evade taxes.

    At a hearing, U.S. District Judge Jed Rakoff on Saturday suggested U.S. prosecutors enlist the help of diplomatic authorities, including perhaps the U.S. State Department, to advance the case.

    The indictment of Wegelin, founded in 1741, was the first in which the United States accused a foreign bank of helping Americans commit tax fraud.

    Wegelin was accused of helping clients hide more than US$1.2 billion in offshore bank accounts. The case is part of a U.S. crackdown on alleged tax fraud, including efforts to pierce the tradition of Swiss bank secrecy.

    “Occasionally in these situations, progress is made through diplomatic channels,” Rakoff told assistant U.S. attorney Daniel Levy at the hearing. “Unlike an individual, arresting a company is somewhat difficult, other than in science fiction.” Rakoff spoke after Levy said “we have no proposal” for how to get Wegelin to formally answer the charge.

    Wegelin issued a statement from Switzerland saying it has not been served with a criminal summons and therefore was not required to appear in court. “The circumstances create a clear dilemma for Wegelin & Co.,” it said. “If it were to adhere to current U.S. legal practice aimed at Swiss banks, it would have to breach Swiss law.”

    It said it would nonetheless “make every effort to resolve this matter within the boundaries of respectful cooperation with the United States and obedience to Swiss law.”

(SD-Agencies)