Credit Suisse breached a plea deal with US authorities by failing to report secret offshore accounts wealthy Americans used to avoid paying taxes, US lawmakers have said, releasing a two-year investigation that detailed the role played by Swiss bank employees in trouble in helping clients tax evasion.
On Wednesday, the United States Senate Finance Committee reported an ongoing, possibly criminal, conspiracy linked to nearly $100 million in accounts belonging to a family of U.S. taxpayers that the bank has not disclosed. He also said Credit Suisse helped an American businessman hide more than $220 million in offshore accounts from the Internal Revenue Service.
Credit Suisse revealed it had found 23 accounts worth more than $20 million each that had not been reported to tax authorities, many of which were exposed just days before the report was released, according to the report. committee. He said his findings showed more than $700 million had been concealed in violation of the nine-year-old plea deal between the bank and the US Department of Justice.
“Credit Suisse got a reduction on the penalty it suffered in 2014 for enabling tax evasion because bank executives swore from top to bottom that they would stop defrauding the United States,” he said. said Senator Ron Wyden, Democratic chairman of the committee. .
“This investigation shows that Credit Suisse has failed to deliver on its promise, and the bank’s pending acquisition does not wipe the slate clean,” he said.
The Swiss government has claimed $3.25 billion Takeover of long-struggling Credit Suisse by rival bank UBS this month amid turmoil in the global financial system. THE bankruptcy of two American banks sparked wider fears that sent shares of Switzerland’s second-biggest bank plummeting as customers withdrew their cash.
The Senate findings pose new problems for UBS as it tries to absorb Credit Suisse and create a single Swiss megabank, the same day UBS named a new CEO to help push through the takeover. It is also Credit Suisse’s latest showdown with US authorities, following settlements worth hundreds of millions of dollars over mortgage-backed securities that were at the root of the financial crisis. of 2008.
Credit Suisse, whose problems for years have ranged from hedge fund losses to fines for failing to prevent money laundering by a Bulgarian cocaine ring, said it “does not condone tax evasion” and insisted the Senate report described “legacy issues” – some dating back a decade – that have since been addressed.
“Since then, we have implemented significant improvements to root out individuals who seek to conceal assets from tax authorities,” the Zurich-based bank said.
“Our clear policy is to close unreported accounts when identified and to discipline any employee who does not follow bank policy or fail to meet Credit Suisse’s standards of conduct,” he said.
UBS said it has assessed ongoing lawsuits and investigations in connection with the Credit Suisse acquisition and expects the transaction to be beneficial to shareholders. He is working to close the sale and get approval from regulators in the coming weeks or months.
The Senate report noted Credit Suisse’s cooperation with the investigation, including the appointment of new management.
“knowingly and voluntarily”
The Swiss lender has paid a reduced fine of $1.3 billion to the US Department of Justice after pleading guilty in 2014 to conspiring to aid and abet US taxpayers in filing false tax and tax returns. other documents with the IRS.
The bank has admitted to having “knowingly and voluntarily” helped thousands of Americans open undeclared tax accounts and conceal offshore assets. He avoided criminal charges in exchange for agreeing to report the undeclared accounts and provide other information to US officials.
The Senate committee said secret offshore accounts belonging to a family of American and Latin American citizens and worth nearly $100 million were closed in 2013, but the money was transferred to other other banks without informing the American authorities.
Through this maneuver, “Credit Suisse allowed what appears to be potentially criminal client tax evasion to go undetected for nearly a decade,” the report said.
The committee said former senior bankers helped manage the family’s accounts. Additionally, Credit Suisse employees helped an American businessman hide $220 million from US authorities despite long knowing he was American, according to the report, which says whistleblowers reported the scheme after the plea deal.
Credit Suisse employees have been tricked into helping accounts hide their US ties because their bonuses depend on the amount of money handled, according to the report. To that end, employees who had clients with assets greater than $20 million or $30 million might have paid extra attention to those accounts because it would mean they would receive larger bonuses, the committee said.
Investigators say bankers have figured out how to code accounts for Americans who hold dual citizenship. These bankers would use the non-US passports of wealthy individuals to evade internal systems designed to search US passports for identifying marks.
Lawmakers on the committee became aware of 13 out of 23 potentially undeclared accounts worth more than $20 million just days before their report was released. Raises concerns Credit Suisse is still disclosing hundreds of millions of dollars in large undisclosed accounts belonging to ultra-wealthy Americans years after the plea deal was signed and is under further scrutiny , the committee said.
