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UBS Closed Secret Big Accounts, Class Claims

OAKLAND, Calif. (CN) - Swiss banking giant UBS converted billions of dollars for its own profit by improperly closing accounts of secret account-holders and refusing to provide records of it, the trust of a former president of the U.N. General Assembly claims in a federal class action.

Lead plaintiff AM Trust, the trust of former Indonesian Vice President Adam Malik, accuses Zurich-based UBS of shutting down the accounts of people who died or were absent for prolonged periods of time, and "withholding or destroying internal records pertaining to these accounts and converting the proceeds to their own use while wrongfully denying requests for information and accounting."

The trust also sued the predecessors of UBS, Union Bank of Switzerland and Swiss Bank Corporation. UBS was formed in 1998 from the merger of the other two banks.

The banks "fast tracked" the closure process to use the assets for profit, rather than classify the accounts as dormant, the lawsuit claims.

When beneficiaries ask about their accounts, the banks say no records exist for accounts that have been closed for 10 years, though "a diligent search could easily reveal the ultimate fate of the accounts and their proceeds," the lawsuit claims.

Malik was an Indonesian politician, ambassador and the 26th president of the U.N. General Assembly. Before his death in 1984, Malik had several Union Bank of Switzerland and UBS bank accounts, containing more than $5 million in cash and gold, according to the complaint.

The trust says in the Sept. 12 lawsuit that it has been trying to recover assets from the accounts for years without success.

It cites instances of impropriety involving the defendant banks. In 1997, it says, a night guard discovered that the Union Bank of Switzerland was destroying documents about dormant assets, including information about companies doing business during the Holocaust and real estate records for Berlin property seized by Nazis and put in Swiss accounts. In a 2009 case, UBS AG paid a $780 million settlement for helping Americans evade taxes by concealing records.

More than 20,000 U.S. citizens have bank accounts with UBS, totaling at least $20 billion in deposits, the complaint states. It claims at least 1,000 people worldwide, including some Americans, were affected by the account closures.

The trust seeks to represent "the worldwide class of secret bank account holders, including their estates and beneficiaries, who have suffered monetary loss due the systematic, deceitful and corrupt financial practices by UBS AG and its predecessors."

It seeks class certification, an accounting, restitution and damages for conversion, unjust enrichment, trespass to chattel, and breach of fiduciary duty.

The trust is represented by Thomas Easton of Springfield, Ore.

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