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Credit Suisse violated tax evasion deal, says US Senate committee

Inquiry reveals Swiss bank failed to disclose nearly $100mn in secret offshore accounts

In a statement Credit Suisse said it "does not tolerate tax evasion". Photograph: Michael Buholzer/Keystone

Owen Walker
Wed Mar 29 2023 - 15:25

The US Senate finance committee has concluded that Credit Suisse violated a 2014 plea deal with the government for the Swiss bank’s role in helping wealthy Americans evade tax.

The latest two-year investigation by the committee found the bank – which is being taken over by rival UBS – failed to disclose nearly $100 million (€92.2 million) in secret offshore accounts belonging to a single family of US taxpayers.

“At the centre 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 US citizens to evade taxes and rip off their fellow Americans,” said senator Ron Wyden, who chaired the committee.

Under the 2014 deal struck with the Department of Justice, Credit Suisse was fined $2.6 billion, but settled for $1.3 billion after it agreed to comply with disclosure rules.

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But in March 2021, several former Credit Suisse bankers who originally blew the whistle on their employer urged US authorities to reopen the case, stating that the tax evasion continued “well after the plea agreement and sentencing”.

The release of the committee’s investigation comes less than two weeks after UBS agreed to buy Credit Suisse for $3.25 billion in a deal orchestrated by Swiss regulators in the face of a deepening crisis at the bank and wider turmoil across the banking sector.

“The bank’s demise does not erase its liabilities. UBS assumed those liabilities,” said Jeffrey Neiman, a lawyer representing the whistleblowers. “The failure to insist on the collection of this $1.3 billion would be asking the American taxpayers to cover the cost of Credit Suisse’s bail out.”

Credit Suisse has faced fines from European regulators over similar issues in recent years, including a €238 million settlement with French authorities to resolve claims that it broke anti-money laundering laws by luring wealthy clients to Switzerland.

In a statement on Wednesday following the release of the finance committee’s investigation, Credit Suisse said it “does not tolerate tax evasion. In its core, the report describes legacy issues, some from a decade ago, and we have implemented extensive enhancements since then to root out individuals who seek to conceal assets from tax authorities.”

It added: “Credit Suisse’s new leadership team has co-operated with the committee’s inquiry and has supported the work of senator Wyden, including in respect of suggested policy solutions to help strengthen the financial industry’s ability to detect undisclosed US persons.” – Copyright The Financial Times Limited 2023

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