Credit Suisse (CS), the Swiss bank taken over this month by rival UBS Group (UBS), helped as many as 25 wealthy American families hide more than $780 million from the IRS, violating a 2014 plea deal with U.S. authorities, according to a Senate Finance Committee report released today.
- Senate investigation alleges Credit Suisse helped wealthy clients evade taxes
- Senate investigation identifies over $780 million in undeclared assets from about 25 families
- Credit Suisse appears to have violated a 2014 plea deal by continuing to help wealthy Americans dodge the IRS.
- Senate Finance Committee Chairman Ron Wyden says it's “time to prosecute.”
A two-year investigation by the committee revealed "major violations," including failing to disclose almost $100 million of secret offshore accounts belonging to a single family, a "potentially criminal tax conspiracy."
The claims came after the 167-year-old lender's impending collapse forced Swiss authorities to orchestrate a buyout by UBS on March 19 for over $3 billion. UBS rehired former CEO Sergio Ermotti to navigate the business through the forced merger.
The Senate investigation also obtained records detailing over $220 million in offshore accounts hidden from the IRS by U.S. businessman Dan Horsky. In 2016, Horsky pleaded guilty to "one of the largest criminal tax evasion cases in American history."
In both instances, Credit Suisse failed to disclose the accounts to DOJ after entering into its plea agreement and only did so after whistleblowers notified U.S. authorities of the existence of the accounts.
Investigators also found 23 large, potentially undeclared accounts belonging to ultra-high-net-worth U.S. individuals Credit Suisse disclosed last year that it identified 10 additional large client relationships involving U.S. people, each holding an account in excess of $20 million, and another 13 accounts in excess of $20 million that could also involve Americans.
Credit Suisse Denies Guilt
Credit Suisse maintains it doesn't tolerate tax evasion and is cooperating with investigators, including Senate Finance Committee Chairman Ron Wyden.
“The report describes legacy issues, some from a decade ago, and we have implemented extensive enhancements since then to root out individuals who seek to conceal assets from tax authorities,” a Credit Suisse spokesperson told CNBC. The terms of the 2014 plea deal included Credit Suisse paying $2.6 billion to various tax authorities as well as the indictments of eight employees since 2011.
'Time To Prosecute' Says Senator
"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," said Senator Wyden.
He said more information had been found in the last week, and the investigation isn't complete.
“It’s time to prosecute and ensure that there are penalties that send a strong message,” Wyden said.