Repeat Offender: Credit Suisse Fined $511M for Renewed Tax Evasion Scheme
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In a significant legal development, Credit Suisse Services AG has admitted to conspiring with U.S. taxpayers to hide more than $4 billion from the Internal Revenue Service (IRS) through at least 475 offshore accounts.
This plea marks a violation of the bank's 2014 agreement with U.S. authorities, under which it had previously paid a $2.6 billion fine for similar misconduct.
The U.S. Department of Justice (DOJ) announced that between 2010 and July 2021, Credit Suisse engaged in a scheme that enabled ultra-wealthy American clients to evade taxes.
Bankers at Credit Suisse falsified records, processed fictitious donation paperwork, and serviced over $1 billion in accounts without documentation of tax compliance. These actions facilitated the concealment of assets and income from the IRS.
Further investigations revealed that from 2014 to June 2023, Credit Suisse AG Singapore maintained undeclared accounts for U.S. taxpayers, holding cash and assets valued at more than $2 billion.
This conduct breached the 2014 plea agreement, which required Credit Suisse to implement compliance programs to prevent such activities.
As part of the resolution, Credit Suisse Services AG will pay a total of $511 million, including $372 million for filing false tax returns and $139 million under a non-prosecution agreement related to the Singapore-based accounts.
The bank has also agreed to cooperate with ongoing investigations and disclose any future relevant information about U.S.-related accounts.
UBS Group AG, which acquired Credit Suisse in 2023, stated that it was not involved in the underlying conduct and has a zero-tolerance policy for tax evasion.
UBS discovered the undeclared accounts during the integration process and voluntarily disclosed them to the DOJ. The bank expects to receive financial credit for its cooperation.
The case has reignited concerns over the recurring illegal activities of global financial institutions and their accountability in upholding compliance with U.S. tax laws.
It also raises questions about the effectiveness of previous settlements in deterring future misconduct.