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Credit Suisse ‘helped US tax evaders’
By Gina Chon in Washington, Kara Scannell in New York and James Shotter in Zurich
Credit Suisse made false claims in US visa applications, conducted business with clients in secret elevators and shredded documents to help more than 22,000 American customers avoid US taxes, according to a scathing report by a US congressional committee.
Credit Suisse handed account statements to one client tucked inside a Sports Illustrated magazine as part of its “cloak and dagger tactics”, according to Senator Carl Levin, chairman of the US Senate Permanent Subcommittee on Investigations.
The bank also helped clients create offshore shell entities to avoid taxes and aided them in structuring transactions to fall below the $10,000 amount that would alert the government, according to the subcommittee’s 175-page report, released on Tuesday.
It said Credit Suisse created an office at Zurich airport where more than 10,000 US accounts were held, known by the code name SIO85. Bankers made 150 trips to the US from 2002 to 2008 to aid in the tax evasion efforts. At its peak, the assets of the more than 22,000 customers totalled as much as $12bn.
In total, about 1,800 bankers were involved in helping clients avoid taxes, leading Senator John McCain, the subcommittee’s top Republican, to call the practices “systematic”.
Credit Suisse declined to comment. People familiar with the matter said it had co-operated as fully as it could under Swiss law, but had been hindered from providing more information because the Senate has not yet approved a protocol to a tax treaty with Switzerland.
Mr McCain also criticised the US justice department for not holding senior individuals accountable, adding that this seemed to be common practice. Mr Levin, a Democrat, accused the department of failing to “pierce the coc00n of bank secrecy” and not using all available legal tools to pursue the case aggressively. He said the DoJ obtained the names of only 238 clients out of more than 22,000.
The DoJ responded that it had charged 73 account holders and 35 bankers and advisers with offences related to offshore tax evasion since 2009.
“The battle against tax havens using secrecy laws to facilitate US tax evasion has bogged down, causing a huge loss to our Treasury,” Mr Levin said. “The Credit Suisse case study shows how a Swiss bank aided and abetted US tax evasion, not only from behind a veil of secrecy in Switzerland, but also on US soil by sending Swiss bankers here to open hidden accounts.”
The findings gave a preview of the questions Credit Suisse top brass and US authorities will face at a subcommittee hearing on Wednesday. Chief executive Brady Dougan, Hans-Ulrich Meister and Robert Shafir, who jointly head its private bank, and Romeo Cerutti, the bank’s general counsel, are among those testifying.
Mr Levin accused Credit Suisse of dragging its feet in co-operating with US authorities.
Credit Suisse is one of 14 banks under investigation by US authorities as part of a probe of Swiss lenders believed to have helped US clients avoid taxes. At least seven former Credit Suisse employees have been arrested but no trials have been held so far.
UBS faced similar allegations and appeared before the Senate subcommittee in 2008. A year later, Switzerland’s largest bank agreed to pay $780m for its role in helping US citizens evade taxes, which Mr Levin said resulted in thousands of client names being revealed and $6bn in taxes being paid to the US government.
“US action has lagged since UBS,” said Mr Levin, who was also critical of the Swiss government. “They owe Uncle Sam. They owe the people of the United States.”
Credit Suisse is expected to draw distinctions between itself and UBS and will emphasise that it made moves to address the issues before US authorities began looking closely into them, people familiar with the matter said.
Any alleged moves made by bank staff to help US clients avoid taxes were not driven by the management, and no senior Credit Suisse executives were involved, these people said. The bank acknowledges it may have moved too slowly in some instances, but it took the matter very seriously, they added.
Credit Suisse set aside SFr295m to deal with the investigation in 2011.
Credit Suisse ‘helped US tax evaders’
By Gina Chon in Washington, Kara Scannell in New York and James Shotter in Zurich
Credit Suisse made false claims in US visa applications, conducted business with clients in secret elevators and shredded documents to help more than 22,000 American customers avoid US taxes, according to a scathing report by a US congressional committee.
Credit Suisse handed account statements to one client tucked inside a Sports Illustrated magazine as part of its “cloak and dagger tactics”, according to Senator Carl Levin, chairman of the US Senate Permanent Subcommittee on Investigations.
The bank also helped clients create offshore shell entities to avoid taxes and aided them in structuring transactions to fall below the $10,000 amount that would alert the government, according to the subcommittee’s 175-page report, released on Tuesday.
It said Credit Suisse created an office at Zurich airport where more than 10,000 US accounts were held, known by the code name SIO85. Bankers made 150 trips to the US from 2002 to 2008 to aid in the tax evasion efforts. At its peak, the assets of the more than 22,000 customers totalled as much as $12bn.
In total, about 1,800 bankers were involved in helping clients avoid taxes, leading Senator John McCain, the subcommittee’s top Republican, to call the practices “systematic”.
Credit Suisse declined to comment. People familiar with the matter said it had co-operated as fully as it could under Swiss law, but had been hindered from providing more information because the Senate has not yet approved a protocol to a tax treaty with Switzerland.
Mr McCain also criticised the US justice department for not holding senior individuals accountable, adding that this seemed to be common practice. Mr Levin, a Democrat, accused the department of failing to “pierce the coc00n of bank secrecy” and not using all available legal tools to pursue the case aggressively. He said the DoJ obtained the names of only 238 clients out of more than 22,000.
The DoJ responded that it had charged 73 account holders and 35 bankers and advisers with offences related to offshore tax evasion since 2009.
“The battle against tax havens using secrecy laws to facilitate US tax evasion has bogged down, causing a huge loss to our Treasury,” Mr Levin said. “The Credit Suisse case study shows how a Swiss bank aided and abetted US tax evasion, not only from behind a veil of secrecy in Switzerland, but also on US soil by sending Swiss bankers here to open hidden accounts.”
The findings gave a preview of the questions Credit Suisse top brass and US authorities will face at a subcommittee hearing on Wednesday. Chief executive Brady Dougan, Hans-Ulrich Meister and Robert Shafir, who jointly head its private bank, and Romeo Cerutti, the bank’s general counsel, are among those testifying.
Mr Levin accused Credit Suisse of dragging its feet in co-operating with US authorities.
Credit Suisse is one of 14 banks under investigation by US authorities as part of a probe of Swiss lenders believed to have helped US clients avoid taxes. At least seven former Credit Suisse employees have been arrested but no trials have been held so far.
UBS faced similar allegations and appeared before the Senate subcommittee in 2008. A year later, Switzerland’s largest bank agreed to pay $780m for its role in helping US citizens evade taxes, which Mr Levin said resulted in thousands of client names being revealed and $6bn in taxes being paid to the US government.
“US action has lagged since UBS,” said Mr Levin, who was also critical of the Swiss government. “They owe Uncle Sam. They owe the people of the United States.”
Credit Suisse is expected to draw distinctions between itself and UBS and will emphasise that it made moves to address the issues before US authorities began looking closely into them, people familiar with the matter said.
Any alleged moves made by bank staff to help US clients avoid taxes were not driven by the management, and no senior Credit Suisse executives were involved, these people said. The bank acknowledges it may have moved too slowly in some instances, but it took the matter very seriously, they added.
Credit Suisse set aside SFr295m to deal with the investigation in 2011.