Report reveals Credit Suisse helped rich clients evade taxes
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An investigation by the US Senate Finance Committee has revealed that troubled Swiss bank Credit Suisse breached a 2014 plea deal agreement with the US Department of Justice. The investigation lasted for two years, with the report showing that the bank avoided taxes after hiding more than $700 million in undeclared accounts.
Credit Suisse enabled tax evasion
The investigations reveal that Credit Suisse worked with ultra-wealthy US clients to help them avoid taxes after hiding more than $700 million in undeclared accounts. The Finance Committee also noted that around $00 million belonging to one family of US-Latin American clients was stashed in secret offshore accounts for almost ten years. These funds were never reported to the US tax authorities.
According to the committee, the revelations of this investigation could amount to an “ongoing potentially criminal conspiracy.” The committee has also said that the bank assisted a business in the United States in hiding more than $220 million in offshore accounts and never reported these transactions to the US Internal Revenue Service.
In 2014, Credit Suisse paid a discounted fine to the Department of Justice after the firm pled guilty to enabling tax evasion by clients. At the same time, the lender agreed to report any undeclared accounts and other details to authorities in the United States.
On the other hand, the Finance Committee has also said that Credit Suisse informed it a few days ago about 23 accounts that contained more than $20 million that have not been decelerated for taxation purposes.
Credit Suisse has responded to the allegations made by US legislators, saying that the firm does not support tax evasion and that it has been working with officials in the United States. The Swiss bank has also said that the issue of tax evasion was a matter that the lender addressed long ago.
UBS Group to acquire Credit Suisse
UBS Group entered an agreement to acquire Credit Suisse earlier this month. Credit Suisse’s financial woes worsened recently after several bank failures in the United States. UBS is set to acquire Credit Suisse for CHF 3 billion, with the deal slated to close by the end of this year.
The US Senate Finance Committee announced that it would recall its former CEO, Sergio P.Ermotti. The executive will oversee the acquisition of Credit Suisse, ranked as the second-largest lender in Switzerland.
It is still unclear if the recent investigative report by the US legislature will affect the acquisition procedures by UBS. The report adds to the troubles facing the lender. In October last year, Credit Suisse paid $495 million to US authorities to settle issues with mortgage-backed securities operations affected during the 2008 financial crisis.
The bank recently faced criminal charges in Switzerland after it allowed a Bulgarian drug trafficker to launder money that was earned illegally. The bank was also found guilty in this case, which was the first criminal trial by a Swiss bank. The merger between Credit Suisse and UBS will create a Swiss megabank with more than $5 trillion in total invested assets.