The U.S. and Switzerland reached an agreement to settle a U.S. Justice Department lawsuit against UBS AG seeking the names of 52,000 American account holders.

Justice Department attorney Stuart Gibson provided no details of the accord in a telephone conference call today with U.S. District Judge Alan Gold. Gibson said a settlement may be submitted in writing on Aug. 7.

“The parties have reached an agreement in principle on the major issues,” Gibson told Gold. “There are some other issues that need to get resolved, and we expect to be able to resolve them during the coming week.”

The U.S. sued UBS on Feb. 19, a day after the largest Swiss bank by assets agreed to pay $780 million to defer prosecution for helping wealthy Americans evade taxes. UBS agreed then to an unprecedented breach of Swiss secrecy laws by giving the Internal Revenue Service data on more than 250 accounts.

The IRS seeks the data because it suspects American account holders of evading taxes. Switzerland called the case a threat to its sovereignty and said it would force UBS to violate criminal laws protecting bank secrecy. The Justice Department previously said a settlement must force UBS to provide data on a “significant number” of account holders.

U.S. Secretary of State Hillary Clinton is meeting today with Swiss Foreign Minister Micheline Calmy-Rey in Washington to discuss the case and other topics.

“There has been an agreement reached on the litigation,” Clinton told reporters before the meeting, adding that “our government worked very hard on this.” Calmy-Rey said she was “very pleased” with the accord.

Since the Swiss handed over the 250 names, three UBS clients in the U.S. have pleaded guilty to filing false tax returns. On July 28, a New York toy salesman, Jeffrey Chernick, admitted filing a false tax return that concealed $8 million at UBS. Chernick implicated four other people while detailing a $45,000 bribe to a Swiss government official.

UBS, based in Zurich, avoided prosecution by admitting it helped taxpayers hide money in Swiss accounts to dodge paying U.S. taxes. UBS admitted that from 2000 to 2007, its Swiss private bankers helped wealthy Americans evade U.S. taxes by setting up sham offshore companies in tax havens. UBS said it created misleading forms saying those offshore companies, not taxpayers, were the beneficial owners.

A settlement would avert a two-day evidentiary hearing that Gold planned to begin on Aug. 3. He rescheduled the hearing for Aug. 10 in case the settlement comes apart.

After a July 29 hearing on the case, attorneys of UBS and the Swiss and U.S. governments submitted a proposed witness list and allocation of time for the hearing. After opening statements, UBS lawyers were to cross-examine IRS Deputy Commissioner Barry Shott and IRS Agent Daniel Reeves.

Justice Department lawyers were then to cross-examine UBS witnesses Isabelle Romy, a former deputy justice at the Swiss Federal Supreme Court; Urs Zulauf, head of legal, enforcement and international affairs at the Swiss Financial Market Supervisory Authority; and Rudolf Wyss, deputy director of the Swiss Federal Office of Justice.

(Source: Bloomberg.com)