Financial Crime World

Credit Suisse Violated Plea Agreement by Failing to Report Secret Offshore Accounts

Washington D.C. - A shocking investigation by the US Senate Finance Committee has revealed that Credit Suisse, a Swiss bank, violated its plea agreement with US authorities by failing to report secret offshore accounts used by wealthy Americans to evade taxes.

Key Findings of the Investigation

  • The committee’s two-year investigation found that Credit Suisse helped a US businessman hide over $220 million in offshore accounts from the Internal Revenue Service (IRS).
  • The bank failed to disclose 23 accounts worth more than $20 million, many of which were uncovered just days before the report was released.
  • Investigators discovered that employees were incentivized to help accounts hide U.S. ties due to bonuses tied to account balances.

Background on Credit Suisse’s Plea Agreement

  • In 2014, Credit Suisse pleaded guilty to conspiracy charges related to aiding and abetting tax evasion and agreed to pay a discounted fine of $1.3 billion.
  • The bank promised to stop facilitating tax evasion as part of its plea agreement.

Criticisms of Credit Suisse’s Handling of Dual-Citizenship Clients

  • The report highlights concerns over Credit Suisse’s handling of dual-citizenship clients, who used their non-US passports to evade internal systems designed to detect US passports.
  • Lawmakers have raised questions about the bank’s ability to disclose hundreds of millions of dollars in large, undeclared accounts belonging to ultra-wealthy Americans.

Response from Credit Suisse

  • The bank has defended its actions, stating that it “does not tolerate tax evasion” and that the report highlights “legacy issues” that have been addressed since the plea deal.
  • However, lawmakers remain skeptical, citing the bank’s failure to fully disclose the extent of its involvement in tax evasion schemes.

Implications for UBS Acquisition

  • The investigation has raised fresh concerns about UBS, which is set to acquire Credit Suisse amid turmoil in the global financial system following the collapse of two US banks.
  • Lawmakers have expressed skepticism about whether UBS will be able to address the issues highlighted in the report.