Credit Suisse helps ultra-wealthy Americans avoid taxes: Senate panel
The report said Credit Suisse transferred more than $100 million linked to a dual-citizen American family to offshore accounts without notifying the Justice Department, which would violate the plea agreement. The report says bank employees also “knowingly” helped Dan Horsky, a US business school professor who pleaded guilty in 2016 to tax fraud, shield $220 million from US tax authorities.
The report further notes that, years after the deal, Credit Suisse revealed there were 23 “potentially undeclared accounts” belonging to US citizens, each containing at least $20 million. Americans hid at least $700 million with Credit Suisse, the report says.
“It could be much higher than that,” said Ryan Carey, spokesman for the Senate Finance Committee. “We just don’t have a lot of insight into these accounts,” only that they contained at least $20 million.
In a statement, Credit Suisse said the report detailed “legacy issues,” some stretching back a decade, and that it has implemented protocols intended to root out individuals seeking to hide assets from U.S. tax authorities. The bank noted that it has worked with the Senate committee, as well as the Justice Department, “to address any remaining legacy conduct or policy concerns, and will continue to do so.”
“Credit Suisse does not tolerate tax evasion,” the statement said.
The charges come during a turbulent period for Credit Suisse, which is now in the process of being absorbed by rival UBS under a deal brokered by the Swiss government. UBS bought Credit Suisse this month for $3.3 billion amid concerns about the bank’s stability. The move was meant to inject calm into the banking system, which was still reeling from the collapse of Silicon Valley Bank and Signature Bank in the US. And although some degree of calm has returned to the sector, UBS still has to undertake the monumental task of merging with another giant.
The panel’s findings could be another headache in that process. The report’s authors believe that any entity that buys Credit Suisse would be liable for any penalties resulting from violations of the 2014 plea agreement, in which Credit Suisse agreed to disclose all of its cross-border activities, among other things. If pursued by the Justice Department, the penalties could exceed more than $1 billion in fines.
In a statement to The Washington Post, UBS spokeswoman Erica Chase said: “As part of our due diligence related to UBS’s acquisition of Credit Suisse, we conducted a review of outstanding litigation and investigative matters. We expect the transaction to be attractive to our shareholders in a wide range of business scenarios.”
In May 2014, Credit Suisse pleaded guilty to helping wealthy Americans hide billions of dollars to avoid paying taxes. In exchange for paying a lower fine — $1.3 billion — the bank had also agreed to a set of compliance measures, including disclosing its cross-border activities, cooperating with Justice Department requests for account information and closing all accounts belonging to account holders who refused to comply with US tax laws.