Credit Suisse pleads guilty in US tax evasion case

Published on NewsOK Modified: May 19, 2014 at 10:08 pm •  Published: May 19, 2014
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WASHINGTON (AP) — European bank Credit Suisse AG pleaded guilty Monday to helping wealthy Americans avoid paying taxes through secret offshore accounts and agreed to pay about $2.6 billion to the U.S. government and regulators.

The Justice Department said it was the largest penalty imposed in any criminal tax case. It is also the largest bank to plead guilty in more than 20 years.

The settlement resolves a yearslong criminal investigation into allegations that Credit Suisse, Switzerland's second-largest bank, recruited U.S. clients to open Swiss accounts, helped them conceal the accounts from the Internal Revenue Service and enabled misconduct by bank employees. The case is part of an Obama administration crackdown on foreign banks believed to be helping U.S. taxpayers hide assets.

Law enforcement officials said a criminal charge was necessary to account for the bank's pattern of misconduct, which spanned decades and included a lack of cooperation with investigators and the destruction of critical documents. But the deal was also structured in such a way as to allow the bank to continue operating.

The penalties will be paid to the Justice Department, the Federal Reserve and the New York State Department of Financial Services.

Attorney General Eric Holder, who was criticized last year after telling Congress that large banks had become hard to prosecute, appeared to foreshadow the guilty plea in a video message earlier this month in which he said no financial institution was "too big to jail."

"A company's profitability or market share can never and will never be used as a shield from prosecution or penalty," Holder told a news conference Monday. "And this action should put that misguided notion definitively to rest."

As part of its plea agreement, Credit Suisse acknowledged that it operated an "illegal cross-border banking business" that enabled thousands of American customers to hide their assets from the Internal Revenue Service.

The case was filed in federal court in suburban Alexandria, Virginia, where eight Credit Suisse employees were indicted in 2011. Two have pleaded guilty.

Credit Suisse chief executive Brady Dougan, who has said previously that senior executives at the bank were not aware that some bankers were helping U.S. customers evade taxes, said in a statement Monday that the bank regrets its past "misconduct" and was looking to resolve the matter and move forward. The bank has said it stopped providing private banking services outside the U.S. to Americans several years ago.

The criminal case follows a damning recent Senate subcommittee investigation that found the bank provided accounts in Switzerland for more than 22,000 U.S. clients totaling $10 billion to $12 billion.