The UBS saga continues.

On Wednesday, the Swiss government said it would seek approval from parliament to go ahead with a deal struck last year with U.S. authorities to reveal the names of Americans with offshore accounts, according to Reuters and the Wall Street Journal (subscription required).

The 2009 agreement between Zurich-based UBS and U.S. and Swiss officials called for the bank to turn over names and account details for 4,450 American UBS clients. In recent years, the Department of Justice Tax Division and the Internal Revenue Service have stepped up its efforts to find and prosecute offshore tax evasion. The U.S. had hoped to obtain the information from UBS to for use in prosecuting tax dodgers.

However, last month a Swiss court threw a wrench into the agreement, halting the turnover and ruling the deal would violate Swiss bank secrecy laws. The court also held that the accounts did not amount to tax fraud, a criminal offense under Swiss laws, but merely tax evasion, a civil offense.

According to Reuters, the Swiss government will ask parliament to eliminate the legal distinction between the two offenses, which would allow UBS to provide the Internal Revenue Service and the U.S. Department of Justice with the information sought.

“We will in this way uphold the international commitments made by Switzerland with a view of finding a definitive resolution to the legal and sovereignty conflict with the United States,” the Swiss government said in a statement. UBS in a statement said it intends to fulfill all commitments under both a criminal and civil settlement of the tax row, including providing relevant account information to Swiss tax authorities, Reuters reports.

According to Reuters, the future of UBS  is “crucial for the stability of the Swiss financial market.” Reuters reports that uncertainty surrounding the agreement has prompted UBS account holders to withdraw billions of Swiss francs. The Swiss government on Thursday will unveil a strategy on how to support its financial services industry, Reuters reports.

A Virginia doctor pleaded guilty Tuesday to conspiracy charges involving an undeclared Swiss bank account under his control, the Justice Department announced.

According to a DOJ news release, Dr. Andrew Silva made false statements about an undeclared Zurich bank account to the Justice Department, Immigration and Customs Enforcement and the U.S. Postal Inspection Service.

Silva, of Sterling, Va., is the most recent American to plead guilty to charges stemming from hidden money in Swiss bank accounts. On Feb. 4, Florida resident Jack Barouh pleaded guilty to filing a false tax return in an attempt to hide $10 million in offshore bank accounts with the Swiss banking giant UBS AG. Barouh was the seventh former client of UBS to plead guilty to a tax felony.

Silva’s account also was in Switzerland, but not with UBS. The DOJ news release did not name the bank where the account was held, but said that it was one world’s largest international banks headquartered in England, with offices in Switzerland and Virginia. UBS is headquartered in Zurich.

Whatever the bank’s identity, today’s news illustrates the Justice Department’s heightened efforts to go after offshore money.

“Today’s plea shows the continued efforts of the Justice Department to investigate and prosecute those citizens who use offshore accounts to hide income and assets,” John A. DiCicco, acting assistant attorney general of the Justice Department’s Tax Division, said in the release. “American taxpayers should rest assured that those who do not file accurate tax returns and who utilize offshore accounts to hide money will be investigated, and when appropriate, prosecuted and sent to jail.”

Silva inherited the undeclared Swiss account from his mother in 1997, the news release said. In 1999, a Zurich-based attorney instructed Silva not to keep any records of the account, and to keep it “hush.” The account was held under the name of a fake trust in Liechtenstein. The attorney also told Silva that he could transport or mail less than $10,000 in U.S. dollars without declaring it.

In September 2009, the bank told Silva that it was closing the account and that he had until the end of the year to withdraw the funds. According the news release, the Zurich attorney and a Swiss banker advising Silva refused to wire the money to the U.S. out of fear of leaving a trail for U.S. authorities. Instead, they advised Silva to smuggle hundreds of thousands of dollars into the U.S. in two individually wrapped “bricks” of cash.

From the release:

According to court documents, Silva admitted that on Nov. 23, 2009, upon his return to the United States, he falsely informed a U.S. Customs Inspector at Dulles International Airport that he had traveled to Switzerland to purchase diamonds. Further, he falsely stated to a U.S. Customs Inspector that he had not recently mailed any U.S. currency from Switzerland into the United States.

According to court documents, for the years 1997 through 2008, Silva made and subscribed false U.S. Individual Income Tax Returns, Forms 1040, that failed to report on the Schedules B attached to the returns that he had an interest in a financial account in a foreign country. Additionally, Silva failed to report the income he earned on his undeclared Swiss account on his tax returns.

According to court documents, from 1997 through 2008, Andrew Silva failed to file with the Department of the Treasury a Report of Foreign Bank and Financial Accounts on Form TD F 90-22.1 (FBAR) reporting his interest in his undeclared Swiss account that had an aggregate value of more than $10,000 at any time during a particular year.

Silva is free on a $50,000 bail pending sentencing, which is set for May 7, the release said. As part of a plea agreement, Silva agreed to forfeit to the government $211,200 that law enforcement officials seized from packages that he mailed from Switzerland. . He faces up to 10 years in prison and a maximum fine of $500,000.

Along with DiCicco, Neil H. MacBride, U.S. attorney for the Eastern District of Virginia, Scot R. Rittenberg, deputy special agent in charge for ICE in Washington, Daniel S. Cortez, postal inspector in charge of the Washington Division, and IRS Criminal Investigation Chief Victor S. O. Song announced the plea in the news release.

Assistant U.S. Attorney Gordon Kromberg, Tax Division Senior Litigation Counsel Kevin M. Downing, and Tax Division Trial Attorneys Mark F. Daly and John E. Sullivan are prosecuting the case.

Despite a high-profile public relations blitz to argue for his freedom, the American banker-turned-informant who tipped prosecutors to alleged widespread tax evasion among clients of Swiss banking giant UBS AG must report to prison on Friday.

Bradley Birkenfeld, who faces a sentence of three years and four months after pleading guilty to a fraud conspiracy charge, had asked U.S. District Judge William Zloch to postpone his surrender date and to hold a hearing to consider a lower sentence. In an order Monday, Zloch refused both requests, The Associated Press reported.

The judge’s order came on the same day the New York Times reported that the Justice Department was considering asking the judge to reduce Birkenfeld’s sentence.

On “60 Minutes” Sunday, Birkenfeld said he didn’t think it is fair that he is the only person in the alleged tax evasion scheme to be sent to prison. ”I gave them the biggest tax fraud case in the world. I exposed 19,000 international criminals. And I’m going to jail for that?” Birkenfeld asked.

But Birkenfeld didn’t tell the government about tax evasion by his biggest client, California real estate developer Igor Olenicoff, who eventually paid $52 million in fines and back taxes. Olenicoff, however, didn’t serve any prision time.

Associate Attorney General Tom Perrelli on 60 Minutes Sunday said of Birkenfeld: “If he had come in with everything he knew, including his own conduct, we think there’s a very good chance he wouldn’t have been prosecuted at all.”

Birkenfeld’s lawyer, Stephen Kohn, said on the same program that “putting Bradley Birkenfeld in jail will be one of the biggest mistakes the United States can make, and it will hurt every taxpayer because you will lose access to other Bradley Birkenfeld’s who will bring to our treasury billions and billions of dollars both immediately and in the future.”

Birkenfeld is seeking a multi-million dollar award for his assistance in the UBS case. Under a 2006 law meant to encourage tax informants to come forward, whistleblowers can reap rewards of 15 to 30 percent of the taxes, fines, penalties and interest ultimately collected by the IRS.

The reward, Kohn said, was a necessary incentive. ”How are you going to get other international bankers, particpants, to come forawrd and tell us about these schemes?” he said.

Prosecutors credited Birkenfeld, who was based in Switzerland, with pointing investigators to thousands of suspected American tax evaders who allegedly concealed assets in UBS’s Swiss bank accounts. More than 14,700 offshore tax evaders have come forward under an I.R.S. amnesty program, and the names and account details of about 4,450 UBS clients were turned over to U.S. authorities under a settlement with the bank.

Below are video clips of Birkenfeld and Perrelli on 60 Minutes:

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The Justice Department probably won’t get all of the 52,000 names of rich Americans suspected of using UBS bank accounts to evade the Internal Revenue Service. But Swiss and U.S. negotiators said that the disclosure of at least 4,450 names is all but certain. Read The Washington Post report from this morning here.

UBS and DOJ lawyers cut an out-of-court deal last week on a civil lawsuit seeking the names after spending hours in a D.C. building without air conditioning. The final negotiations came after months of heated back and forth on the lawsuit that was turned into a diplomatic issue by the Swiss government.

Swiss government officials previously said they would forbid UBS from complying with any U.S. court order to reveal names. Officials in the Alpine tax haven have not explicitly agreed to disclose any names, but Swiss and U.S. negotiators have agreed that at least 4,450 names will inevitably be turned over to the IRS, The Post reported.

“We will be receiving an unprecedented amount of information,” said IRS Commissioner Doug Shulman, according to The Post.

Read the DOJ news release here, the U.S.-Swiss declarations here and the bank agreement and consent here.

The Justice Department and UBS AG cut an out-of-court deal this week after months of heated back and forth on a civil lawsuit that seeks to force the Swiss bank to divulge the names of rich Americans suspected of tax evasion. The details of the deal forged in the early hours of Wednesday morning still aren’t public but Reuters reported today that it was a hot and steamy affair.

An individual close to the negotiations told Reuters that when the Swiss and American lawyers signed off on the agreement at 2:45 a.m., they had been in a Mint Annex Building room on 9th Street NW in Washington without air conditioning for nearly five hours. D.C. was just recovering from a two-day heat wave which brought temperatures that neared 100 degrees.

“They were all sweating pretty good,” the person close to the negotiations told Reuters.

The Justice Department has demanded that UBS to turn over 52,000 names of account holders suspected of using Swiss accounts to evade Internal Revenue Service.  The Swiss government turned the matter into a diplomatic issue, saying it would forbid UBS from complying with any U.S. court order to reveal the names. The latest reported settlement talks focused on some 7,000 to 5,000 accounts tied to offshore companies and trusts.

Read our previous report here.

UBS AG and the Justice Department have reached an out of court agreement on a contentious civil lawsuit that seeks to force the Swiss bank to divulge the names of rich Americans suspected of tax evasion, The Associated Press reported this morning.

No details of the agreement were announced during a telephone conference that included U.S. District Judge Alan S. Gold, DOJ Tax Division attorney Stuart Gibson and UBS attorney Eugene Stearns, according to The AP. The lawyers only told Gold that they concluded negotiations, the news wire service reported.

The Justice Department demanded that UBS to turn over 52,000 names of account holders suspected of using Swiss accounts to evade Internal Revenue Service.  The Swiss government turned the matter into a diplomatic issue, saying it would forbid UBS from complying with any U.S. court order to reveal the names. We previously reported that the latest  settlement talks focused on some 7,000 accounts tied to offshore companies and trusts.

UBS AG and the Justice Department have agreed that they will seek an out of court settlement on a contentious civil lawsuit that seeks to force the Swiss bank to divulge the names of rich Americans suspected of tax evasion. Read today’s New York Times article here.

UBS.com

The Justice Department demanded that UBS to turn over 52,000 names of account holders suspected of using the Swiss accounts to evade U.S. taxes.  The Swiss government turned the matter into a diplomatic issue, saying it would forbid UBS from complying with any U.S. court order to reveal the names. We previously reported that settlement talks are now focusing on some 7,000 accounts tied to offshore companies and trusts. While the final contours of the settlement aren’t known, it’s likely the DOJ will get at least some of the names it sought.

Tax Division attorney Stuart Gibson said in a conference call with U.S. District Court Judge Alan Gold in Miami that UBS and the U.S. would be able to reach a final deal by Aug. 7, according to The Times. Gold said he would call off a trial that was slated to start Monday, the newspaper reported.

UBS paid $780 million to settle criminal charges in February. And it was the criminal side of the Tax Division that helped negotiate the settlement, after “high-ranking Swiss officials” flew to Washington to resolve it, the Times reported. Gibson, who is heading up the civil case, learned about the agreement Thursday at 7:45 p.m, the Times reported.

Secretary of State Hillary Clinton is slated to discuss the matter with Swiss Foreign Minister Micheline Calmy-Rey today, The Times added.

UPDATE: The final version of the New York Times story deleted information that had appeared on the Web mid-day Friday about the criminal division participating in international settlement negotiations that did not include the civil division lawyers pursuing the case. The possible explanations for the deletion are 1) the information was wrong and someone complained or 2) an editor deemed it extraneous and cut it.

The Swiss government has turned the UBS AG tax evasion case into a major affaire diplomatique. In an amicus filing, Switzerland said UBS would violate Swiss bank secrecy laws if the bank complied with any U.S. court order to reveal the names of 52,000 Americans suspected of using UBS accounts to duck the tax man. Therefore, Switzerland will order UBS not to comply and could even seize UBS documents to prevent disclosure.

“When the Government of Switzerland issues such an order, it will be an Act of State,” the Swiss government said in the amicus filing, throwing down the gauntlet.

This afternoon, U.S. District Judge Alan Gold asked the Department of Justice to prepare a response to the Swiss government’s ultimatum by Sunday at noon, “after consultations with the Executive Branch, the Department of State and/or  other relevant government agencies.”

Specifically, Gold wants to know “what remedies the United States is prepared to request of this Court… in the event the Petition is granted and there is non-compliance.”

The U.S. needs to explain “how far it intends to proceed by way of request for enforcement, up through and including receivership and/or seizure of UBS’ assets within the United States,” Gold wrote.

You can download the order here.

Attorney General Eric Holder met with Swiss Justice Minister Eveline Widmer-Schlumpf on Monday. But they apparently didn’t discuss her top agenda item: Resolving U.S. government demands that Swiss financial giant UBS disclose the names of 52,000 wealthy Americans hiding an alleged $14.8 billion in secret Swiss bank accounts.

Holder, who represented UBS in a racial discrimination case while at Covington & Burling, has recused himself from the high-profile matter. Instead, says Reuters:

Holder thanked Widmer-Schlumpf for Switzerland’s offer for help with closing the Guantanamo Bay prison for terrorism suspects, including possibly accepting detainees held at the facility. They also discussed cooperation on fighting organized crime, terrorism and terrorist financing, the department said.

Acting Deputy Attorney General David Margolis led the substantive UBS talks with Widmer-Schlumpf, Reuters said.