UBS, the biggest Swiss bank, is the target of a widening tax evasion investigation in France, a spokeswoman for the Paris prosecutor's office said on Friday, an indication that the lender's problems with the French government are growing.
A French judge on Thursday placed UBS AG, the Swiss parent company, under formal investigation on suspicion that it illegally sold banking services to French citizens that helped them to set up secret accounts abroad, according to Agnès Thibault-Lecuivre, the spokeswoman for the Paris prosecutor's office. The Swiss bank also was identified as an ''assisted witness,'' a less serious status, in a concurrent investigation of suspected money laundering and tax evasion, she said.
The expanded inquiry comes just a week after the bank's local subsidiary, UBS France, was put under formal investigation on similar suspicions. In the French legal system, a formal investigation, sometimes compared to an indictment in the American system, can drag on for years, and does not necessarily lead to charges or trial.
An assisted witness is required to answer prosecutors' questions with a lawyer present, but is thought less likely to ultimately face charges.
Yves Kaufmann Lobato, a UBS spokesman in Zurich, sought to play down the significance of the latest development, noting that the investigation had been the subject of news reports since early last year.
''We will continue working with the authorities in France within the applicable legal framework to arrive at a resolution to this matter,'' he added, citing a bank statement.
The investigators are examining the question of whether bankers from the Swiss parent company broke a French law against "illicit solicitation" by actively approaching potential French clients.
According to a report on Friday in the French newspaper Le Monde, UBS bankers regularly sought to ingratiate themselves into networks of affluent people, mingling at sporting events and concerts in order to seek out possible clients for tax evasion.
At least 353 French citizens suspected of evading taxes through UBS have been identified, and the French government has sought administrative assistance from the Swiss government in four cases, the newspaper reported, without citing its source.