Wegelin & Co., the oldest Swiss private bank, said on Thursday it would shut its doors permanently after pleading to a criminal conspiracy charge in the U.S. and admitting that it had helped wealthy Americans for years avoid tens of millions of dollars in taxes.

In the latest blow to Switzerland's centuries-old banking secrecy laws, Wegelin became the latest bank on Thursday to reach a deal with U.S. prosecutors as they continue a crackdown on offshore banks suspected of helping American evade taxes.

As part of the deal, Switzerland's oldest private bank will pay as much as $74 million in penalties to US authorities and has said it "will cease to operate as a bank" once the case wraps up.

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The plea effectively marks the end for one of Switzerland's most storied banks, whose original clients predate the American Revolution. It however, also marks a potential turning point in a battle by US authorities against Swiss bank secrecy.

Robert Fink, a New York-based tax attorney said:

It has an important symbolic significance in that you have a bank that has no branches in the U.S., but the U.S. government was able to reach them and get them to plead guilty. It puts other banks on notice as to the long arm of the U.S. law.

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Prosecutors said more than 100 U.S. taxpayers conspired with Wegelin to conceal income of $1.2 billion from the Internal Revenue Service for almost 10 years.

U.S. prosecutors added that Wegelin "deliberately set out" to capture illegal banking business lost by UBS and another unnamed Swiss bank after the U.S. began investigating their operations in 2008.

UBS, Switzerland's largest bank, avoided U.S. prosecution in 2009 by admitting it aided tax evasion, paying $780 million and handing over data on 250 accounts. It later disclosed information on about 4,450 more accounts.

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"Wegelin became a haven for U.S. taxpayers seeking to circumvent the tax code by hiding their money in secret offshore accounts, and the bank willfully and aggressively jumped in to fill a void that was left when other Swiss banks abandoned the practice due to pressure from U.S. law enforcement," U.S. attorney Preet Bharara said.

Otto Bruderer, a managing partner at the St. Gallen- based bank, entered a guilty plea on behalf of the bank and said:

Wegelin was aware that this conduct was wrong. However, Wegelin believed that, as a practical matter, it would not be prosecuted in the U.S. for this conduct because it had no branches in the U.S. and because of its understanding that it acted in accordance with, and not in violation of, Swiss law and that such conduct was common in the Swiss banking industry.

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