After a multi-year investigation into Credit Suisse’s use of illegal offshore bank accounts, the DOJ Monday announced the bank’s guilty plea and the largest-ever monetary penalty in a criminal tax case.
The Swiss bank admitted one count of conspiring to aid tax evasion. It pay about $2.6 billion in penalties and hire an independent monitor for up to two years.
Officials from DOJ, Federal Reserve and New York’s Department of Financial services agreed to punish the bank without revoking its charter.
The DOJ said the bank and its subsidiaries conspired to help U.S. taxpayers evade taxes by concealing illegal, undeclared bank accounts.
“Credit Suisse not only knew about this illegal, cross-border banking activity; they wilfully aided and abetted it. Hundreds of Credit Suisse employees, including at the manager level, conspired to help tax cheats dodge U.S. taxes,” Attorney General Eric Holder Jr. said.
Holder said bank employees destroyed bank records and concealed transactions involving undeclared accounts by limiting withdrawal amounts and using offshore credit and debit cards to relocate the funds.
Eeven after DOJ investigating started, “Credit Suisse failed to retain key documents, allowed evidence to be lost or destroyed, and conducted a shamefully inadequate internal inquiry,” Holder said.
Credit Suisse is the largest bank to plead guilty in 20 years. It will pay a fine of over $1.13 billion and nearly $670 million in restitution to the IRS.
The DOJ has indicted eight Credit Suisse employees since 2011, including two managers. Two of the eight have pleaded guilty so far.
Earlier this year, the bank paid about $196 million in penalties to the SEC for providing cross-border brokerage and investment services to U.S. clients without registering first with the agency.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.
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