Swiss Bank Credit Suisse Accused of Failing to Report Secret Offshore Accounts Used for Tax Evasion

A two-year investigation by the US Senate Finance Committee has revealed that Swiss bank Credit Suisse violated a plea agreement with US authorities by failing to report secret offshore accounts used by wealthy Americans to avoid paying taxes.

Credit Suisse’s Alleged Role in Tax Evasion

The committee’s findings show that employees at Credit Suisse played a significant role in aiding tax evasion, and that more than $700 million was concealed in violation of the bank’s 9-year-old plea deal. The investigation revealed that:

• Credit Suisse helped a family of American taxpayers with nearly $100 million in offshore accounts to avoid declaring their income.
• A US businessman was aided in hiding over $220 million from the IRS.
• Former senior bankers at Credit Suisse managed the family’s accounts, and employees were incentivized to help clients hide their US ties in order to receive larger bonuses.

Bank’s Use of Coding Systems to Evade Internal Controls

The Senate report also highlighted Credit Suisse’s use of coding systems to evade internal controls designed to identify US passport holders. This allowed them to open accounts for Americans with dual citizenship, and the committee found that:

• 13 out of 23 potentially undeclared accounts worth over $20 million were discovered just days before releasing their report.
• Concerns remain that Credit Suisse is still disclosing hundreds of millions of dollars in large, undeclared accounts belonging to ultra-wealthy Americans.

Credit Suisse’s Response

Credit Suisse has denied any wrongdoing, claiming that the Senate report described “legacy issues” that have been addressed since. However, Senator Ron Wyden, the Democratic chairman of the committee, said that the bank’s failure to comply with its plea agreement is a “clear indication” that it did not make good on its promise to stop aiding tax evasion.

Impact on Financial Stability

The findings come as Credit Suisse prepares for its takeover by rival bank UBS, which has raised concerns about the potential impact on financial stability. The Senate report’s release also casts a shadow over UBS’ plans to absorb Credit Suisse and create a single Swiss megabank.