Credit Suisse violated a plea agreement with US authorities by failing to report secret offshore accounts that wealthy Americans used to avoid paying taxes, US lawmakers said Wednesday, releasing a two-year investigation that detailed the role employees at the embattled Swiss bank had in aiding tax evasion by clients. The US Senate Finance Committee pointed to an ongoing, possibly criminal conspiracy tied to nearly $100 million in accounts belonging to a family of American taxpayers that the bank did not disclose. It also said Credit Suisse helped a US businessman hide more than $220 million in offshore accounts from the IRS.
Credit Suisse revealed that it had found 23 accounts each worth more than $20 million that were not declared to tax authorities, many of them unveiled just days before the report was released, according to the committee. It said its findings show that more than $700 million was concealed in violation of the bank’s 9-year-old plea deal with the US Justice Department. “Credit Suisse got a discount on the penalty it faced in 2014 for enabling tax evasion because bank executives swore up and down they’d get out of the business of defrauding the United States,” said Sen. Ron Wyden, the Democratic chairman of the committee.
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The Senate committee said secret offshore accounts belonging to a family of dual US-Latin American citizens and worth nearly $100 million were closed in 2013 but the money was transferred to other banks without telling US authorities. With that maneuver, “Credit Suisse enabled what appears to be potentially criminal tax evasion by a client to go undetected for almost a decade,” the report says. The committee said former senior bankers helped manage that family’s accounts. In addition, Credit Suisse employees helped a US businessman hide $220 million from US authorities despite long knowing he was an American, according to the report, which said whistleblowers flagged the scheme after the plea deal.Credit Suisse workers were incentivized to help accounts hide US ties because their bonuses depend on the amount of money being managed, the report said. To that end, employees who had clients with assets above $20 million or $30 million may have given those accounts special consideration because it would mean they got larger bonuses, the committee said. UBS said it has assessed outstanding lawsuits and investigations as part of the Credit Suisse acquisition and expects the deal to be beneficial for shareholders. It’s 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 having appointed new leadership. The Swiss lender paid a discounted fine of $1.3 billion to the US Justice Department after pleading guilty in 2014 to conspiracy to aid and assist US taxpayers in filing false income tax returns and other documents with the IRS. The bank acknowledged “knowingly and willfully” helping thousands of Americans open accounts that weren’t declared to tax authorities and concealing offshore assets. It avoided criminal charges in exchange for agreeing to report undeclared accounts and provide other information to US officials.
