Credit Suisse Group AG continues to help rich Americans hide assets from the IRS nearly a decade after a unit pleaded guilty to tax-evasion conspiracy, the US Senate Finance Committee said.
(Bloomberg) — Credit Suisse Group AG continues to help rich Americans hide assets from the IRS nearly a decade after a unit pleaded guilty to tax-evasion conspiracy, the US Senate Finance Committee said.
The committee uncovered “major violations” of the $2.6 billion plea deal the bank reached with the Justice Department in 2014, according to a report released Wednesday. The report cited “what may be an ongoing criminal tax conspiracy” involving nearly $100 million in secret offshore accounts belonging to a family of dual US-Latin American citizens.
Several other Swiss banks received undeclared funds in 2012 and 2013 from the family with dual US-Latin American citizens. Those banks are Union Bancaire Privee, PKB Privatebank AG and Bank Leumi.
Senator Ron Wyden, the Oregon Democrat who chairs the committee, slammed “greedy Swiss bankers” who appear to be engaged in a “massive, ongoing conspiracy to help ultra-wealthy U.S. citizens to evade taxes and rip off their fellow Americans,” despite Credit Suisse’s promises otherwise, according to a statement accompanying the report.
Read the full report here.
Credit Suisse said it does not tolerate tax evasion, and its new management is “actively cooperating” with the Department of Justice and other US authorities to address remaining legacy conduct or policy concerns.
The report comes as the bank is being sold to rival UBS in a 3 billion franc ($3.3 billion) deal brokered by the Swiss government. The takeover is the culmination of years of scandal and mismanagement which arguably began with the US tax-evasion probe. The report raises new challenges for UBS as it takes over a bank that could face further action from the Department of Justice.
To oversee the historic acquisition, UBS is bringing back Sergio Ermotti as chief executive officer, tapping a Swiss insider with extensive restructuring experience to replace Ralph Hamers after just over two years.
Read More: UBS Veteran Ermotti Returns to Lead Credit Suisse Takeover
The Senate report also comes a day after prosecutors in France raided some of the nation’s largest banks, including Societe Generale SA and BNP Paribas SA, as part of an investigation into suspected tax fraud and money laundering.
Wyden said the Senate’s investigation shows Credit Suisse didn’t live up to the 2014 deal and that its pending acquisition “does not wipe the slate clean.” The senator called on the Justice Department to crack down on “repeat offenders like Credit Suisse” and pursue criminal investigations of individual bankers.
Under the plea agreement, the bank still has an obligation to identify all undeclared accounts to the Internal Revenue Service. The committee uncovered two dozen “large, potentially undeclared accounts” belonging to wealthy clients, the report said. Last year, the bank identified 10 clients with accounts of $20 million or more. In recent days, the banks also disclosed another 13 accounts with $20 million or more that may be held by US persons.
“It is deeply concerning that almost nine years after executives testified before Congress that the bank would clean up its act, Credit Suisse is still disclosing hundreds of millions of dollars in secret offshore accounts belonging to wealthy U.S. taxpayers,” the report said.
Credit Suisse said it is doing its part.
“Our clear policy is to close undeclared accounts when identified, and to discipline any employee who fails to comply with bank policy or falls short of Credit Suisse’s standards of conduct,” the bank said.
(Adds return of Ermotti in fifth paragraph and details and context throughout.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.