Credit Suisse Group settled a tax fraud and money-laundering case in France on Monday with a €238 million payment to the state, putting another legal headache behind it as it readies to unveil a strategic overhaul.
The agreement, announced in a French court and confirmed by the bank in a statement, resolves the investigation in France over whether the Swiss bank helped clients avoid paying tax on their wealth.
“It is an important moment for Switzerland’s banking history and the relation of the country with the French tax authorities, judge Stephane Noel said during the Paris hearing, after detailing the amounts and approving the resolution of the criminal allegations.
The alleged scheme, which prosecutors say took place in several countries between 2005 and 2012, caused a fiscal damage of more than €100 million to the French state, the prosecution office said.
Credit Suisse said in a statement that it was “pleased to resolve this matter, which marks another important step in the proactive resolution of litigation and legacy issues”.
One of Switzerland’s systemically important banks, Credit Suisse is scheduled to release details of a much-anticipated strategic review alongside third-quarter results on Thursday.
The bank, where former Bank of Ireland chief executive Francesca McDonagh was recently appointed chief operating officer, has appeared more willing to settle legal matters under new legal chief Markus Diethelm, who joined in July and has taken a more proactive approach than his predecessor.
This month it agreed to pay $495 million (€504 million) to settle allegations it mis-sold mortgage-backed securities in the United States, the latest payout related to past blunders that have battered the bank’s reputation.
In June, the bank was convicted of failing to prevent money laundering by a Bulgarian cocaine trafficking gang, while a Bermuda court ruled that a former Georgian prime minister and his family were due damages of more than $600 million from Credit Suisse's life insurance arm, which the bank is appealing.
A similar case is pending in Singapore.
But the bank last week also won a key class-action US lawsuit over allegations of price-fixing in the foreign-exchange market, vindicating its decision to fight rather than settle a lawsuit that originally threatened it with as much as $19 billion in potential damages.
The US justice department is also reportedly investigating whether Credit Suisse continued helping US clients hide assets from authorities, eight years after the Swiss bank paid a $2.6-billion tax evasion settlement.
Monday’s case began in 2016 and hit headlines the following year with raids in five nations — France, Germany, the Netherlands, the UK and Australia. Dutch authorities said after the raids that the tip that sparked the investigation had come from one or more informers.
The case is similar to another investigation in France into local rival UBS Group that culminated last year in penalties worth €1.8 billion for the Swiss bank. UBS has lodged a further challenge to try to overturn the finding at France’s top court. — Reuters / Bloomberg
(c) Copyright Thomson Reuters 2022
