A Credit Suisse unit, Credit Suisse Services, has pleaded guilty to U.S. charges of helping ultra-wealthy Americans evade taxes, agreeing to pay a hefty fine of over $510 million, the U.S. Department of Justice (DOJ) announced on Monday. The bank was found guilty of conspiring to conceal more than $4 billion in assets across at least 475 offshore accounts, specifically designed to avoid U.S. tax laws and reporting requirements.
Details of the Guilty Plea and Charges
The guilty plea is connected to Credit Suisse’s operations in Singapore, where it maintained accounts for U.S. taxpayers using offshore accounts to evade taxes. According to the DOJ, these acts included falsifying records, processing fictitious donation paperwork, and servicing accounts exceeding $1 billion without proper documentation to prove tax compliance.
The case is part of a broader effort by U.S. authorities to clamp down on offshore tax evasion, particularly among the ultra-wealthy. The plea follows an earlier 2014 settlement where Credit Suisse paid a $2.5 billion fine for similar charges, marking the bank as the largest institution in 20 years to plead guilty to a U.S. criminal charge.
Previous Violations and Longstanding Issues
Credit Suisse’s actions have come under increased scrutiny, particularly after the U.S. Senate Finance Committee found in 2023 that the bank violated the terms of its 2014 settlement by continuing to facilitate tax evasion and hiding over $700 million from the U.S. government. The bank’s failure to adhere to its prior agreement has now led to further legal consequences.
UBS Takes Responsibility After Acquisition
UBS, which acquired Credit Suisse in 2023, clarified on Monday that it was not involved in the underlying conduct but acknowledged the guilty plea by its subsidiary, Credit Suisse Services. The bank emphasized that it will cooperate with ongoing investigations and ensure full disclosure of any future information related to U.S.-connected accounts.
Non-Prosecution Agreement and Future Cooperation
In addition to the fine and guilty plea, Credit Suisse Services entered into a non-prosecution agreement with the DOJ. This agreement mandates the company, as well as UBS, to fully cooperate with investigations and disclose any relevant information uncovered regarding U.S.-related accounts. This measure aims to provide greater transparency and accountability moving forward.
The resolution of this case marks another chapter in the ongoing global effort to tackle financial fraud and offshore tax evasion, with major financial institutions facing significant consequences for their role in facilitating such schemes.
