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DOJ: Credit Suisse helped rich Americans hide money

  • By The Swiss Times
  • 30 March 2023

Another day, another complication to the UBS takeover of failing Credit Suisse. This time, the U.S. Department of Justice is involved.

DOJ: Credit Suisse helped rich Americans hide money
Senate Finance Committee Chairman Ron Wyden (D-Ore.) called CS employees “greedy Swiss bankers” and said his committee’s investigation only scratches the surface (Keystone SDA).

In the 24 hours since UBS announced that its former CEO Sergio Ermotti would return to lead the takeover of floundering Credit Suisse (CS), another complication has arisen: the U.S. Senate Finance Committee just revealed that CS has been helping ultra-rich Americans avoid paying their U.S. taxes for years.

More Credit Suisse baggage for UBS to carry

In 2014, CS paid a $2.5 billion fine to U.S. authorities for aiding Americans in evading paying their taxes. CS entered into a plea deal with the U.S. Department of Justice (DOJ) promising to be “100% compliant” with the Foreign Account Tax Compliance Act requirements. But old habits die hard, apparently.

The Senate Finance Committee on Wednesday announced it had concluded a two-year investigation into CS which revealed “major violations” of that 2014 plea deal. CS has continued to aid wealthy clients in at least $700 million worth of tax evasion.

Among its violations, CS failed to disclose nearly $100 million in secret offshore accounts belonging to one family with dual U.S.-Colombian citizenship. The “ongoing and potentially criminal conspiracy” went on for nearly 10 years, according to the DOJ. CS bankers hid the fact that “The Family,” as they are referred to in legal documents, held American citizenship and therefore must pay U.S. taxes. CS bankers helped “The Family” close accounts and transfer funds to a slew of Swiss banks without notifying U.S. authorities, as was required under the 2014 plea deal.

At the center of that scandal is CS’s former head of private banking for Latin America, according to the DOJ. This employee only disclosed the accounts after a whistleblower contacted U.S. authorities.

In addition, CS helped former business professor David Horsky hide $220 million in offshore accounts. In 2017, the DOJ arrested Horsky.

DOJ: Credit Suisse helped rich Americans hide money
From left to right: UBS Chairman Colm Kelleher and outgoing CEO Ralph Hamers congratulate newly appointed UBS CEO Sergio Ermotti at a press conference in Zurich Wednesday (Keystone SDA).
Investigation just ‘Scratches the surface’

“The Committee believes the conduct of ultra-high net worth tax evaders at Credit Suisse and other banks in Switzerland just scratches the surface,” the Senate Finance Committee said in a statement.

Senator Ron Wyden (D-Oregon) is chair of the committee. He said:

“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.”

Sen. Ron Wyden (D-Ore.)

In an emailed statement to Reuters, CS said its “new leadership team has cooperated with the Committee’s inquiry and has supported the work of Sen. Wyden, including in respect of suggested policy solutions to help strengthen the financial industry’s ability to detect undisclosed U.S. persons.”

The new owners of CS, UBS, and the Swiss government will have to assume responsibility of the fines, according to the DOJ. No word yet on what is owed. The DOJ and U.S. Internal Revenue Service is still investigating if CS has violated more agreements with the U.S. government.

Is Ermotti man enough for this job? Time will tell.

This article may be freely shared and re-printed, provided that it prominently links back to the original article.

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