By Katharina Bart
ZURICH (Reuters) - U.S. officials have arrested a former UBS banker working for the Swiss operations of Coutts, the private banking division of Royal Bank of Scotland Group Plc , sources told Reuters.
The arrest comes as U.S. authorities crack down on tax evasion and has revived Swiss bankers' fears that they could face detention if they travel to the United States and are suspected of helping people hide money in offshore accounts.
Coutts notified staff in Geneva on Friday that one of its private bankers had been arrested last week when he entered the U.S. for a vacation, a source familiar with the situation said.
A Swiss government source said on Monday they did not know whether the person arrested had been charged. Neither source gave a reason for the arrest.
"The Federal Department for Foreign Affairs has knowledge of the temporary arrest of a Swiss citizen in New York and is providing support in terms of consular protection," the Swiss government said in an emailed statement, declining to provide details or name the person because of Swiss privacy laws.
According to Swiss media reports, the man was transferred to Miami and fitted with an electronic surveillance bracelet. The reports did not make it clear whether he remains in custody.
"As far as we are aware, Coutts is not a target of any U.S. investigation," the bank said.
"The U.S. is not a target market for Coutts and it is our policy to only do business with U.S. declared, or U.S. tax compliant clients," Coutts said.
The man worked with Russian clients for UBS until 2009, and began working at Coutts in 2012, according to Swiss media. UBS declined to comment.
Last year, many Swiss bankers told Reuters they were changing their holiday plans to avoid the risk of arrest or extradition.
Tax lawyer Douglas Hornung said lower-ranking bank employees may also need to be wary of travelling to the United States.
"The Swiss Bankers Association said in September that Swiss bank employees didn't have anything to worry about, and this does seem to hold for the higher echelons, but it doesn't seem to be the case for other employees," Hornung said.
The arrest is seen by some in Switzerland as the United States applying pressure to the Swiss government as they grapple to end a dispute over Swiss banks accused of helping wealthy Americans evade billions of dollars in taxes.
"It seems the United States are using intimidation methods to show that they aren't bluffing," said Jean-Christophe Schwaab, President of the French-speaking branch of The Association of Swiss Bank Employees (SBPV).
"For people in senior positions, we still advise not to travel to the United States. The situation obliges us to remain prudent," he said.
Two weeks ago, U.S. authorities charged Bank Frey executive Stefan Buck and Swiss attorney Edgar Paltzer with helping American clients hide millions of dollars in offshore accounts, one of a series of prosecutions aimed at curtailing offshore tax evasion services sold by Swiss and Swiss-style banks.
In March 2009, UBS agreed to pay $780 million to settle charges brought by the Justice Department. That settlement as well as a wave of Americans coming clean on offshore accounts has sparked a second line of attack against Swiss banks.
Those in the crosshairs include Credit Suisse , Julius Baer , and Switzerland's oldest bank Wegelin & Co, which in March agreed to pay nearly $58 million in penalties and said it would shut its doors after admitting to helping wealthy Americans evade taxes.
(Additional reporting by Chris Vellacott in London, Emma Farge and Martin de Sa'Pinto; Editing by Erica Billingham)