US: Despite Plea Deal, Credit Suisse Continued to Facilitate Tax Evasion

The U.S. Senate Finance Committee determined Wednesday that Credit Suisse violated its 2014 plea deal, following revelations that the Swiss bank facilitated acts of tax evasion for several of its wealthy clientele in the range of hundreds of millions of dollars.

 Credit Suisse ZurichCredit Suisse violated its 2014 plea deal with the U.S. DOJ by hiding hundreds of millions of dollars from the IRS on behalf of its wealthy American clients. (Photo: Wally Gobetz, Flickr, License)As part of a two-year investigation into the Zurich-based financial institution, the finance committee discovered that Credit Suisse conspired to assist wealthy U.S. taxpayers hide their money from the Internal Revenue Service (IRS) in offshore accounts.

In doing so, the now former Swiss banking giant, which was recently acquired by rival UBS, violated the terms of its plea deal with the U.S. Department of Justice (DOJ).

“At the center of this investigation are greedy Swiss bankers and catnapping government regulators, and the result appears to be a massive, ongoing conspiracy to help ultra-wealthy U.S. citizens to evade taxes and rip off their fellow Americans,” said U.S. Senator Ron Wyden, who chaired the committee.

The deal originally came about after the bank’s executives pleaded guilty in 2014 to conspiring to aid U.S. taxpayers file false income tax returns and help them maintain undeclared accounts and concealing their offshore assets and income from the IRS,” the report said.

In exchange, Credit Suisse avoided criminal prosecution and paid what the finance committee calls “a heavily discounted fine of $1.3 billion” to the justice department.

The former banking giant also acquiesced to disclose all of its cross-border activities and that, from then on, it would be “100 percent compliant” with its obligations under the Foreign Account Tax Compliance Act, or FATCA. This meant it had agreed to share with U.S. financial authorities all accounts on its books held by American citizens.

But as part of the Senate Finance Committee’s investigation, an additional 23 undeclared accounts were uncovered—totaling more than $20 million each—all belonging to U.S. citizens.

Also brought to light was the $220 million that the bank helped stash away in offshore accounts on behalf of another U.S. client, a businessman named Dan Horsky. The revelation amounts to one of the largest criminal tax evasion cases in American history, the report said.

“In both instances,” the report continued, “Credit Suisse failed to disclose the accounts to DOJ after entering into its plea agreement, and only did so after whistleblowers notified U.S. authorities of the existence of the accounts.”

The bank’s fall comes just more than a year after the release of Suisse Secrets, the international investigation that uncovered how its executives had for years knowingly opened their doors to autocrats, drug dealers, suspected war criminals, and human traffickers.

“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,” Wyden said. “This investigation shows Credit Suisse did not make good on that promise, and the bank’s pending acquisition does not wipe the slate clean.”