Feds say Credit Suisse helped Americans dodge taxes
May 19th 2014 By Fires Stone
The U.S. Justice Department on Monday filed criminal charges against Credit Suisse, alleging the Swiss financial giant helped Americans open offshore accounts in order to dodge taxes.
Credit Suisse is pleading guilty to the charges and will pay a total of $2.6 billion to settle the federal lawsuit.
“Credit Suisse conspired to help U.S. citizens hide assets in offshore accounts in order to evade paying taxes. When a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here,” U.S. Attorney General Eric Holder said in a press conference to announce the settlement.
The agency said the bank set up “sham entities” for clients seeking to keep hide assets in overseas accounts. Credit Suisse also falsified and destroyed U.S. tax records to cover up the scheme, according to the suit. The company helped customers withdraw funds from the undeclared accounts by hand-delivering cash, through correspondent banks, and by providing accountholders with offshore credit and debit cards so they could illegally repatriate funds.
Credit Suisee “failed to take even the most basic steps to ensure compliance with tax law,” Holder said, noting that eight employees of the bank have been indicted in connection with the tax-evasion probe, while two have pleaded guilty.
Credit Suisse did not immediately respond to a request for comment.
Of the financial penalty against Credit Suisse, the U.S. Treasury Department will get $1.8 billion, while the Federal Reserve and New York State Department of Financial Services will receive $100 million and $715 million, respectively.
The penalty resolves a years’- long criminal investigation into allegations that the bank, Switzerland’s second-largest, recruited U.S. clients to open Swiss accounts, helped them conceal the accounts from the Internal Revenue Service and enabled misconduct by bank employees. The case is part of an Obama administration crackdown on foreign banks believed to be helping U.S. taxpayers hide assets.