In a major break in a massive tax-evasion investigation, UBS AG and the governments of Switzerland and the U.S. have reached a settlement that could force UBS to turn over identities of thousands of account holders, a Justice Department attorney told a U.S. District Court Judge Friday morning.

Stuart Gibson, a Justice Department tax division attorney, didn't detail the settlement in a conference call with Judge Alan Gold that included lawyers for UBS and the Swiss government.