Credit Suisse Accused of Violating Plea Deal by Concealing Secret Offshore Accounts

Senate Investigation Finds Credit Suisse Involved in Ongoing Tax Evasion

Credit Suisse has been accused of violating a 2014 plea agreement with the US authorities by continuing to help ultra-wealthy Americans evade taxes and concealing more than $700 million from the government. According to a two-year investigation by the Senate Finance Committee, Credit Suisse played a significant role in aiding tax evasion by clients, including a criminal conspiracy involving the nondisclosure of almost $100 million in secret offshore accounts held by a single family.

The Senate panel found “major violations” of the agreement, which was reached after the bank enabled wealthy Americans to evade taxes. Former senior bankers at Credit Suisse were involved in managing the large and undeclared offshore accounts. The bank identified 23 additional large and undeclared accounts belonging to wealthy Americans, each with assets over $20 million, and the Senate panel claims there are more accounts.

Senator Wyden referred to an ongoing conspiracy by Credit Suisse to help ultra-high net worth tax evaders evade taxes. Lawmakers on the committee became aware of 13 out of 23 potentially undeclared accounts worth over $20 million just days before releasing their report.

Credit Suisse Denies Allegations, Promises Preventive Measures

Credit Suisse’s leadership denied involvement in tax evasion and cooperated with US authorities. A Credit Suisse spokesperson denied the allegations and stated that the bank does not tolerate tax evasion. The spokesperson also claimed that the report describes legacy issues from a decade ago and the bank has implemented extensive enhancements since then.

Credit Suisse previously faced settlements worth hundreds of millions of dollars over mortgage-backed securities. The recent allegations come just after Credit Suisse reached an emergency deal to be acquired by rival UBS.

Credit Suisse pledged to pay a $2.5 billion fine in the 2014 agreement, becoming the largest bank in 20 years to plead guilty to a US criminal charge.

Swiss Government Pushes for Credit Suisse Takeover by UBS Amid Turmoil

The Swiss government pushed for a $3.25 billion takeover of Credit Suisse by rival bank UBS this month amid turmoil in the global financial system. However, the Senate findings pose new problems for UBS as it tries to absorb Credit Suisse and create a single Swiss megabank.

Bankers were incentivized to help accounts hide US ties because their bonuses depend on the amount of money being managed. Credit Suisse is trying to prove it does not tolerate tax evasion and has implemented extensive enhancements to root out individuals seeking to conceal assets from tax authorities.

As per the Senate report, Credit Suisse found 23 accounts each worth more than $20 million that were not declared to tax authorities. The Senate Finance Committee pointed to an ongoing, possibly criminal conspiracy tied to nearly $100 million in accounts belonging to a family of American taxpayers that the bank did not disclose.

Credit Suisse Faces Criticism Over Past Scandals

In addition to tax evasion allegations, Credit Suisse was involved in several scandals, including defrauding investors over an $850 million loan to Mozambique and failure to prevent money laundering by a Bulgarian cocaine trafficking gang.

Credit Suisse helped a US businessman hide more than $220 million in offshore accounts from the IRS. Bankers at Credit Suisse were allegedly involved in managing the large and undeclared offshore accounts. The committee believes that ultra-high net worth tax evaders at Credit Suisse and other banks in Switzerland are involved in such practices.

Conclusion

Credit Suisse’s complicity in ongoing tax evasion by wealthy Americans has come under scrutiny once again, as the Senate investigation alleges major violations of the bank’s 2014 plea agreement with the US Justice Department. The bank pledged to pay a $2.5 billion fine in the 2014 agreement, becoming the largest bank in 20 years to plead guilty to a US criminal charge. However, recent allegations of ongoing tax evasion and concealment of secret offshore accounts have put Credit Suisse under scrutiny once again. With UBS seeking to acquire the troubled bank, it remains to be seen whether Credit Suisse will be held accountable for its past misdeeds.

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