Switzerland's largest bank UBS AG has agreed to pay US$780 million to the US government to settle charges of conspiring to defraud the United States by impeding the Internal Revenue Service (IRS), the Justice Department said on Wednesday.

"As part of the deferred prosecution agreement and in an unprecedented move, UBS, based on an order by the Swiss Financial Markets Supervisory Authority, has agreed to immediately provide the United States government with the identities of, and account information for, certain United States customers of UBS's cross-border business," the department said in a statement.

As part of the deal struck in federal court in Fort Lauderdale, Florida earlier on Wednesday, "UBS has further agreed to pay US$780 million in fines, penalties, interest and restitution."

According to court documents, in 2000, after it purchased the brokerage firm Paine Webber, UBS voluntarily entered into an agreement with the IRS that required UBS to report to the IRS income and other identifying information for its US clients who held US securities in a UBS account.

Court documents allege that the agreement also required UBS to withhold income taxes from US clients who directed investment activities in foreign securities from the United States.

The information further asserts that, in order to evade those new reporting requirements, employees and managers within the cross-border business, with the knowledge of certain UBS executives, helped US taxpayers open new UBS accounts in the names of nominees and/or sham entities.

According to court documents, the assets of the individual's accounts were then transferred to the newly created accounts, as to which the US taxpayers would not be identified as a beneficiary.

"In light of the bank's willingness to acknowledge responsibility for its actions and omissions, its cooperation and remedial actions to date, and its promised continuing cooperation and remedial actions, the government will recommend dismissal of the charge, provided the bank fully carries out its obligations under the agreement," the Justice Department said.

(Xinhua News Agency February 19, 2009)