- Senate Finance Committee report on Wednesday slammed Credit Suisse
- Bank concealed more than $700 million from US tax authorities, it said
- A single American family hid nearly $100 million in secret offshore accounts
Credit Suisse has been accused of helping ultra-wealthy Americans evade taxes and concealing more than $700 million from tax authorities, including one unidentified family with $100 million stashed in secret offshore accounts.
The US Senate Finance Committee made the claims in a report on Wednesday citing information from multiple whistleblowers, after concluding its two-year investigation into Credit Suisse.
The committee said it had uncovered ‘major violations’ of a 2014 plea agreement between the Swiss lender and the US Department of Justice to settle charges of enabling tax evasion.
Attorney Jeffrey Neiman, a former federal prosecutor who represents the whistleblowers, told DailyMail.com he believes the Justice Department should claw back $1.3 billion in reduced fines from the 2014 plea deal.
‘The failure to insist on the collection of this $1.3 billion would be asking the American taxpayers to cover the cost of Credit Suisse’s bail out,’ said Neiman, referring to the $3.2 billion takeover of the Swiss bank by rival UBS this month. ‘The bank’s demise does not erase its liabilities.’
Neiman said that his whistleblower clients had risked prosecution in Switzerland to bring forward information that ‘even after 2014 and up until its demise’ Credit Suisse continued to help Americans evade taxes and hide their money in offshore accounts.
The violations cited in the report included failing to disclose nearly $100 million in secret offshore accounts belonging to a single family of American taxpayers, which it said represented an ‘ongoing and potentially criminal conspiracy’.
The family, which was not named it the report, was described as having dual citizenship in the US and a Latin American country, with the head of the family residing in Miami.
Citing whistleblowers, the report said Credit Suisse bankers coded the family’s accounts in a way that only reflected their Latin American citizenship, masking the fact that they were US citizens and residents.
The report said the family’s Credit Suisse accounts were closed in 2013, but that the funds were transferred to other banks without notifying US authorities as required by the 2014 plea agreement.
‘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 US citizens to evade taxes and rip off their fellow Americans,’ said Senate Finance Committee Chair Ron Wyden in a statement.
The findings are just the latest embarrassment for Credit Suisse, whose troubles in recent years ranged from fines for failing to prevent cocaine money laundering to multi-billion losses in the collapse of US investment fund Archegos.
In a statement to DailyMail.com, a Credit Suisse spokesperson said the bank ‘does not tolerate tax evasion’ and had been ‘actively cooperating’ with US authorities.
‘In its core, 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,’ the bank said.
‘Credit Suisse’s new leadership team has cooperated 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 US persons,’ the bank added.
‘Our clear policy is to close undeclared accounts when identified, and to discipline any employee who fails to comply with bank policy or falls short of Credit Suisse’s standards of conduct,’ the statement said.
The report comes just weeks after the crisis which resulted in UBS launching a $3.2 billion takeover of Credit Suisse at the urging of Swiss regulators, and highlights the potential legal risks UBS inherited in the deal.
During takeover talks, UBS expressed concerns about taking on any legal or regulatory liabilities of troubled Credit Suisse following the merger, but the Swiss government agreed to backstop such losses up to $9.8 billion.
The Senate Finance Committee report also offers new details on how Credit Suisse bankers aided Dan Horsky, who pleaded guilty in November 2016 to conspiring to conceal approximately $200 million from US tax authorities.
Horsky, a former business professor at the University of Rochester, made millions from investing early in a wildly successful startup business, but tried to conceal the funds in offshore accounts, according to court filings.
The Senate committee said it had obtained records showing Credit Suisse bankers long had evidence in their possession that Horsky was a US citizen and resident, and actively worked to help conceal his beneficial ownership of the accounts.
Horsky was sentenced to seven months in prison and paid more than $100 million in fines and back taxes.
Wyden, an Oregon Democrat, called on the Department of Justice to pursue criminal investigations in response to the committee’s new report.
‘In addition to a significant penalty for the bank, the individual bankers involved in these schemes must also face criminal investigation,’ he said in a statement.
‘It simply makes no sense to allow the bankers who have their hands on these hidden accounts and enable tax evasion to get away scot free.’
Earlier this month, the Swiss government pressed for a takeover of long-troubled Credit Suisse by its rival bank UBS this month amid turmoil in the global financial system.
The collapse of two US banks ignited fears of a broader contagion, and shares of Switzerland’s second-largest bank tumbled as customers withdrew their money.