Major Bank Allegedly Enabling Tax Evasion For Wealthy US Citizens
According to lawmakers, Credit Suisse violated a 2014 plea agreement requiring the agency to report offshore accounts used to store money tax-free.
A prominent financial services company has been aiding wealthy U.S. citizens with tax evasion. According to lawmakers, Credit Suisse violated a 2014 plea agreement requiring the agency to report offshore accounts used to store money tax-free. Authorities have been investigating the role employees played in the process for two years.
According to the Associated Press, the Senate Finance Committee believes the tax evasion conspiracy is linked to approximately $100 million in undisclosed funds belonging to multiple American taxpayers. Credit Suisse is also said to have helped an individual store over $220 million in offshore accounts so the IRS wouldn’t notice. An additional 23 accounts, worth over $20 million each, were not declared.
Interestingly, these accounts were uncovered days before the Finance Committee’s report was released. Findings indicate that over $700 million was hidden in violation of the existing plea settlement. “Credit Suisse got a discount on the penalty it faced in 2014 for enabling tax evasion because bank executives swore they’d [stop] defrauding the United States,” Committee Chairman Ron Wyden said.
Wyden added that Credit Suisse did not “make good on that promise,” as evidenced by the investigation. “The bank’s pending acquisition does not wipe the slate clean,” he added. The financial institute paid a $1.3 billion fine to the U.S. Justice Department after admitting to aiding U.S citizens with tax evasion by helping them file false returns with the IRS.
Credit Suisse said it “knowingly and willfully” assisted thousands of Americans in concealing offshore assets and open undeclared accounts. But the financial outfit avoided tax evasion charges by agreeing to report undeclared accounts to U.S. officials. At the time, offshore accounts worth $100 million were closed after the money was secretly moved to other banks.
The tax evasion investigation comes as Credit Suisse is being absorbed by UBS, Switzerland’s most prominent multinational investment bank. The acquisition is part of an emergency rescue amid the global banking crisis. But the inquiry threatens to complicate discussions for a new settlement that was estimated at over $1 billion, CNN Politics reports.
The tax evasion debacle also creates a problem for the Justice Department, as lawmakers promised to take a firmer stance on white-collar crime and corporations that break the law repeatedly. Attorney Jeffrey Nieman, who represents several whistleblowers and informants, said Credit Suisse’s breach of its plea deal means officials should insist on collecting $1.3 billion from the institute.
He added that Credit Suisse’s collapse was due to its own misconduct and mismanagement. Therefore, the bank should not be handed a “get out of jail free card in the United States” since no individual or organization is above the law. “We remain optimistic that the Justice Department will hold Credit Suisse accountable for continuously defrauding the United States,” Nieman said.
A Credit Suisse spokesperson told CNN Politics that the bank, under new leadership, plans to cooperate with the Senate inquiry as it does not tolerate tax evasion. As such, the firm hired a legal team to carry out an internal investigation. They will identify accounts that violate laws to reach a new deal with the Justice Department.
Moreover, Credit Suisse, whose troubles related to hedge fund losses and failure to prevent money laundering have been ongoing. The institute also insists that the report described “legacy issues” that have already been addressed.
