Raoul Weil, once the third most senior executive at UBS, has been arrested in Italy based on an Interpol notice sought by US authorities, media reports said.

US authorities are seeking to extradite Weil from Italy to face charges of helping US clients conceal money from US tax authorities, reports said.

"When Raoul Weil was indicted in 2008 he was immediately released from all his duties at the bank. UBS reached a final settlement concerning the US cross border issue in 2010," the bank told WealthBriefing in a statement today after being asked about the reports.

Weil was indicted in 2008 in a Florida court on charges that he oversaw the bank’s cross-border business and helped rich US clients hide billions in assets. A federal judge later declared Weil a fugitive. According to the indictment, between 2002 and 2007, he oversaw the Swiss bank’s cross-border private banking business that provided services to some 20,000 US clients who collectively hid about $20 billion in assets.

A report by the Wall Street Journal quoted UBS as saying that Weil was released from his duties at the bank when he was indicted.

UBS no longer provides offshore banking services to US clients. In the most high-profile individual banking case yet, the bank paid $780 million to settle civil charges and handed over names of over 4,400 US taxpayers to the US authorities. It also transferred some account details in a separate move to settle criminal charges. The move was seen as a historic breach of Swiss bank secrecy.

This summer, the US and Swiss governments signed a bilateral treaty to draw a line under the wrangle over the accounts that Swiss banks had managed. This agreement is designed to encourage Swiss banks that are not yet under investigation to disclose US account holders and pay associated penalties. Depending on the specific details, some banks will be officially given a clean record while others may have to pay fines. The exact details of how this US-Swiss pact will operate in practice remain unclear, as WealthBriefing learned recently at a briefing in Zurich from lawyers about the issue.