Troubles Continue For Credit Suisse As Whistleblowers Claim The Bank Helped Rich Americans Dodge Taxes

It seems that troubles for the collapsed Switzerland bank Credit Suisse haven't ended despite a rescue deal with bigger rival UBS.

The U.S. Senate Finance Committee has found out that Credit Suisse violated a 2014 plea deal with U.S. authorities by continuing to help ultra-wealthy Americans evade taxes and concealing more than $700 million from the government.

Major Violations By Credit Suisse

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After concluding a two-year investigation into Credit Suisse, the committee said it had uncovered "major violations" of the 2014 agreement between the Swiss lender and the U.S. Department of Justice (DoJ) for enabling tax evasion.

The Swiss bank only disclosed the accounts, as well as those used by a U.S. businessman to conceal more than $220 million, after whistleblowers contacted U.S. authorities, the committee said, as per a Reuters report.

Either UBS or the Swiss government should assume responsibility for any future fines, the committee said, calling on the DoJ and the Internal Revenue Service to investigate whether Credit Suisse should face more penalties.

The violations found by the committee included failing to disclose nearly $100 million in secret offshore accounts belonging to a single family of dual U.S.-Latin American citizens, which it said represented an "ongoing and potentially criminal conspiracy."

Also Read: 'Deutsche Bank Is Not The Next Credit Suisse': Analysts

"Cooperating With US Authorities"

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In an emailed statement, as per a Reuters report, Credit Suisse said it did not tolerate tax evasion and had been cooperating with U.S. authorities.

"Credit Suisse¡¯s new leadership team has cooperated with the Committee¡¯s inquiry and has supported the work of Senator Wyden, including in respect of suggested policy solutions to help strengthen the financial industry¡¯s ability to detect undisclosed U.S. persons," the bank said, referring to Senate Finance Committee Chairman Ron Wyden.

In a statement Wyden said: "At the center of this investigation are greedy Swiss bankers and catnapping government regulators, and the result appears to be a massive, ongoing conspiracy to help ultra-wealthy U.S. citizens to evade taxes and rip off their fellow Americans."

Credit Suisse had become the largest bank in 20 years to plead guilty to a U.S. criminal charge in 2014, agreeing to pay a $2.5 billion fine for helping Americans evade taxes in a conspiracy that spanned decades.

It was one of the scandals that rocked Switzerland's second-largest lender and contributed to it ultimately being forced into the arms of bigger rival UBS.

In 2022, it pleaded guilty to defrauding investors over an $850 million loan to Mozambique, and in June, the bank was convicted by Switzerland's Federal Criminal Court of failing to prevent money-laundering by a Bulgarian cocaine trafficking gang. Click here to learn more about it.

Also Read: UBS-Credit Suisse Merger Puts The Future Of 14,000 Indian Employees In Jeopardy

Helping 'The Family'?

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According to the committee, Credit Suisse bankers helped a family of U.S.-Latin American citizens, referred to as "The Family," hide nearly $100 million from the U.S. taxman and let the tax evasion continue undetected for almost a decade.

Credit Suisse's bankers reportedly masked the fact that members of the family held American citizenship and then when shutting the accounts in 2013, transferred the funds to other banks in Switzerland and elsewhere without notifying the Department of Justice, as the 2014 plea deal required.

Credit Suisse's former head of private banking for Latin America played a significant role in managing the account, the committee said. A source familiar with the matter said the account was known as "the Colombian family", as per the report.

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