ZURICH (Reuters) - U.S. prosecutors are widening their probe of how Swiss banks helped wealthy Americans avoid taxes to look at insurers as well, the Wall Street Journal reported on Monday, citing unnamed sources.
Zurich-based Swiss Life in December returned funds to hundreds of American clients who had invested in wrappers linked to bank accounts at Bank Frey, a Swiss private bank, according to the WSJ report.
A spokeswoman for Swiss Life said the insurer had not been contacted by U.S. officials.
Frey, a private bank, is one of 14 Swiss firms under formal U.S. investigation for its dealings with U.S. clients and untaxed assets. It said late last year it would close because the probe's costs eclipse the bank's financial strength.
Insurers in Switzerland have been preparing for months for U.S. officials to investigate products known as insurance wrappers - life insurance policies into which the very wealthy place stocks, private equity holdings and other bankable assets, allowing them to lower their tax rate.
Returning client funds would represent a stepping up of measures from last year, when insurers were trying to ensure that American clients who bought the insurance products could show that they had paid taxes due to the United States, industry insiders had told Reuters.
The insurance investigations have taken a backseat to a Swiss/U.S. government-brokered scheme to extract Swiss banks from prosecution for aiding tax evasion through hidden offshore accounts.
The U.S. Justice Department said recently it had received 106 requests from Swiss entities to participate in a settlement program aimed at resolving past tax crimes for Swiss banks, but that not all the entities might be banks and would thus not be eligible.
Reporting By Katharina Bart; Editing by Michael Shields and Jane Merriman