Swiss bank UBS announced that Raoul Weil, chairman and CEO of UBS Global Wealth Management and Business Banking, is stepping aside following a grand jury indictment.

The firm said Wednesday that Weil has been indicted by a Federal grand jury sitting in the Southern District of Florida in connection with the ongoing investigation of UBS’s U.S. cross-border business by the US Department of Justice. Weil, who is also a member of the group executive board, was previously head of UBS Wealth Management International from 2002 to 2007.

The Justice Department and Internal Revenue Service announced that Weil has been charged with conspiring with other executives, managers, private bankers and clients of the banking firm to defraud the United States. According to the indictment, between 2002 and 2007, Weil oversaw the Swiss bank’s cross-border private banking business that provided services to some 20,000 U.S. clients who reportedly concealed approximately US$20 billion in assets from the IRS. It further claims that Weil mandated that Swiss bankers grow the cross-border business, despite knowing that this would cause bankers to violate U.S. law.

The indictment alleges that through the use of nominee entities, encrypted laptops, numbered accounts and other counter surveillance techniques, Weil and others at the bank assisted U.S. clients conceal their identities and offshore assets from the IRS. It points out that an indictment is merely an allegation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

“Weil has determined that, in the interest of the firm and its clients, and in order to defend himself, he will relinquish his duties at this time pending the resolution of this matter,” it said, adding that, on an interim basis, Marten Hoekstra, currently deputy CEO of Global Wealth Management & Business Banking and Head of Wealth Management US, will assume Weil’s duties.

The bank also noted that, as announced on July 17, UBS will cease providing cross-border private banking services to US-domiciled clients through its non-US regulated units. “UBS is fully committed to continuing its efforts to cooperate with the investigation of its US cross-border business and to working in a responsible manner with all relevant authorities towards a satisfactory resolution of this matter,” it said.

“Professionals, including bankers, who promote fraudulent offshore tax schemes against the United States, will be held accountable,” said John Marrella, deputy assistant attorney general of the Justice Department’s Tax Division. “These individuals face severe consequences including imprisonment and substantial fines.”

“The IRS is aggressively pursuing anyone who helps wealthy individuals hide their assets offshore and dodge the tax system,” said IRS Commissioner Doug Shulman. “As the global commerce and capital flows continue to increase, we have stepped up our efforts on international tax evasion.”