Creator: TYRONE SIU | Credit: REUTERS
Credit Suisse violated a 2014 plea deal with U.S. authorities by continuing to help ultra-wealthy U.S. citizens evade taxes and conceal more than USD 700 million from the government, the U.S. Senate Finance Committee found on Wednesday.
After the necessity of UBS UBSG.S’s last-minute rescue of Switzerland’s second-largest bank, Credit Suisse CSGN.S, the Swiss financial regulator… After concluding a two-year investigation into Credit Suisse, which this month agreed to a rescue takeover by rival, the committee said it had uncovered “major violations” of the 2014 agreement between the Swiss lender and the U.S. Department of Justice for enabling tax evasion.
These violations included failing to disclose nearly USD 100 million in secret offshore accounts belonging to a single family of U.S. taxpayers, which it said represented an “ongoing and potentially criminal conspiracy”. In an emailed statement, Credit Suisse said it did not tolerate tax evasion and had been co-operating with U.S. authorities.
“Credit Suisse’s new leadership team has co-operated with the Committee’s inquiry and has supported the work of Senator Wyden, including in respect of suggested policy solutions to help strengthen the financial industry’s ability to detect undisclosed U.S. persons,” the bank said, referring to Ron Wyden, the Senate Finance Committee Chairman.
“At the center of this investigation are greedy Swiss bankers and catnapping government regulators, and the result appears to be a massive, ongoing conspiracy to help ultra-wealthy U.S. citizens to evade taxes and rip off their fellow Americans,” Wyden said in a statement.
Representatives for the U.S. Department of Justice did not immediately respond to a request for comment. Credit Suisse in 2014 became the largest bank in 20 years to plead guilty to a U.S. criminal charge, agreeing to pay a USD 2.5 billion fine to authorities for helping U.S. citizens evade taxes in a conspiracy that spanned decades.
The final straw
It was one of a string of scandals that rocked Switzerland’s second-biggest lender and contributed to it being forced into the arms of UBS. Last year, Credit Suisse pled guilty to defrauding investors over an USD 850 million loan to Mozambique meant to pay for a tuna fishing fleet, and in June the bank was convicted by Switzerland’s Federal Criminal Court of failing to prevent money-laundering by a Bulgarian cocaine trafficking gang.
Swiss authorities engineered the rescue of Credit Suisse earlier this month as they scrambled to prevent the lender from collapsing. UBS on Wednesday rehired Sergio Ermotti as CEO to steer its takeover of Credit Suisse and reassure the world’s wealthy that UBS remains a safe harbour for their money.
A spokesman for Credit Suisse declined to comment. The government-brokered purchase of Credit Suisse by UBS last weekend has been widely criticized by both politicians and ordinary citizens in Switzerland. Finma, in particular, has come under scrutiny for whether it should’ve done more to prevent Credit Suisse’s collapse.
Potential options
Amstad responded that FINMA is “exploring the options” when asked if it is considering holding current Credit Suisse managers liable for the failure of Switzerland’s second-largest bank.
“CS had a cultural problem that translated into a lack of responsibilities,” Amstad was quoted as saying by NZZ, adding: “Numerous mistakes were made over several years”. In recent years, FINMA brought six public enforcement actions against Credit Suisse.
Source: Credit Suisse has violated U.S. tax evasion deal: U.S. Senate Finance Committee | TVP World
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