The US authorities are moving to taking legal action against Wegelin, the Swiss bank, on charges that it enabled US citizens evade tax, a report said, citing unnamed sources.

The US authorities are moving to taking legal action against Wegelin, the Swiss bank, on charges that it enabled US citizens evade tax, Reuters reported, citing two unnamed sources.

An indictment is possible, although the bank is seeking a deferred prosecution agreement, which would be less damaging. The outcome depends on how prosecutors, the US State Department and the US Treasury Department agree to treat the matter, the report said.

Founded in 1741, Wegelin is one of Switzerland's oldest banks.

If legal action goes ahead, it will represent a further step in a crackdown on Swiss banking by the US that has been in operation for several years. The increasingly tough stance by the US has already led banks such as UBS, Wegelin, Julius Baer and Credit Suisse to cease providing offshore banking to US clients.

The report said Wegelin declined comment, as did the US Justice Department.

The US is carrying out a criminal probe into 11 Swiss and Swiss-style banks, including Wegelin; they are suspected of selling offshore tax evasion services to tens of thousands of wealthy US citizens. Inquiries, growing out of scrutiny of UBS, are focused on Credit Suisse and Basler Kantonalbank among others, the report said.

Last week, Wegelin confirmed that three of its employees had been indicted by US prosecutors in Manhattan for selling tax evasion services. The charges outlined the sales role of senior unnamed partners at the bank.

The office of the Manhattan US Attorney said the indictment of the three bankers charged them with trying to "capture business lost by UBS and another large international Swiss bank in the wake of widespread news reports that the Internal Revenue Service was investigating UBS" in 2008 and 2009.