The Department of Justice (DOJ) announced that Credit Suisse Services AG has agreed to settle with the government for over $510 million due to its involvement in helping U.S. taxpayers evade IRS regulations by using offshore accounts.
The substantial sum, which includes “penalties, restitution, forfeiture, and fines,” stems from a guilty plea and non-prosecution agreement that the bank, now under UBS ownership, finalized on Monday. The DOJ stated that Credit Suisse conspired to conceal over $4 billion in assets owned by high-net-worth clients through numerous offshore accounts.
According to the DOJ, during the period from January 2010 to July 2021, Credit Suisse Services AG collaborated with its employees, U.S. customers, and other affiliates to intentionally assist U.S. clients in hiding their ownership and control of assets and funds held with the bank.
During this timeframe, the bank allowed extremely affluent U.S. customers to maintain “undeclared” offshore accounts and provided them with “offshore private banking services” that facilitated the concealment of assets from the IRS. This continued failure to report such accounts, known as FBARs, constituted a breach of a prior plea agreement established in 2014, the DOJ noted.
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The non-prosecution agreement with the DOJ highlights undeclared accounts held by American taxpayers, totaling over $2 billion, at Credit Suisse AG Singapore from 2014 to June 2023.
The DOJ mentioned that UBS, upon acquiring Credit Suisse, discovered these undeclared accounts at its newly acquired subsidiary and proactively reported their findings to the DOJ.
As part of their agreement, Credit Suisse Services AG and UBS committed to cooperating with ongoing investigations and providing any additional information regarding U.S. accounts that may surface.
In 2014, Credit Suisse was notably the largest bank in two decades to plead guilty to a U.S. criminal charge, leading to a significant $2.5 billion fine for facilitating tax evasion by American clients over several decades.
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The U.S. Senate Finance Committee reported in 2023 that Credit Suisse had violated its 2014 agreement by continuing to assist in tax evasion efforts, resulting in the concealment of more than $700 million from authorities.
UBS confirmed on Monday that Credit Suisse Services AG had pleaded guilty to a single count of conspiracy to assist in the preparation of misleading income tax returns.
“UBS was not involved in the underlying conduct and maintains a zero-tolerance policy toward tax evasion,” a spokesperson stated. “With this resolution, UBS is pleased to have addressed another legacy issue from Credit Suisse, in line with our commitment to resolve such matters swiftly and equitably for all stakeholders.”
In March 2023, UBS agreed to acquire Credit Suisse as the latter faced insolvency threats, leading to the merger and completion of the transaction later that year.
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Reuters contributed to this report.
