Credit Suisse Plea Deal Puts U.S. Taxpayers at High Risk

Credit Suisse Plea Deal Puts U.S. Taxpayers at High Risk

Credit Suisse Services AG Plea Agreement Puts U.S. Taxpayers at High Risk

Credit Suisse Services AG recently pleaded guilty to conspiring to conceal more than $4 billion in U.S. taxpayer money by placing the funds into hidden and secret offshore accounts.  This was an alleged breach of a 2014 plea agreement that Credit Suisse AG entered into with the United States. Hiding money in Switzerland is nothing new; for many years, taxpayers have been working with Swiss Foreign Financial Institutions to hide money outside of the United States to escape reporting and U.S. tax compliance. This is often done by creating false entities and using numbered accounts to conceal the money and income generated from the holdings. Unfortunately, for US taxpayers, Credit Suisse has agreed to cooperate with the United States and presumably will provide the US taxpayer information to the US government — which can result in criminal investigations and prosecution of US taxpayers.

Third-Party Facilitators Should Also Be Careful

It is important to note that when organizations such as Credit Suisse Services AG conspire with US taxpayers to shift assets into private and hidden accounts outside of the prying eyes of the U.S. Government, they typically work with third parties to do so. Therefore, for any US taxpayer that may have engaged with a third party to facilitate the transfer of this money into foreign accounts, they should be aware that many potential hazards and pitfalls — depending on who becomes the center of the investigation and who decides to turn over US taxpayer information to save their hide. For taxpayers who are out of compliance and have not filed the requisite international information reporting form such as the FBAR or Form 8938, they may want to consider entering into one of the offshore amnesty programs while the programs are still available and before they are contacted by the IRS because then they lose the opportunity to do so.

As provided by the DOJ:

Credit Suisse Services AG Pleads Guilty to Tax Crimes, Signs a Separate Non-Prosecution Agreement Related to Conduct in Singapore, and Agrees to Pay More Than $510M

• • • “Credit Suisse Services AG pleaded guilty and was sentenced today to conspiring to hide more than $4 billion from the IRS in at least 475 offshore accounts. The guilty plea by the Swiss corporation is the result of a years-long investigation by U.S. law enforcement to uncover financial fraud and abuse.

    • In addition to the plea, Credit Suisse Services AG entered into a non-prosecution agreement (NPA) with the Justice Department’s Tax Division and U.S. Attorney’s Office for the Eastern District of Virginia in connection with U.S. Accounts booked at Credit Suisse AG Singapore. Under the NPA, Credit Suisse Services AG agreed to cooperate with the Justice Department in ongoing investigations and to pay significant monetary penalties for maintaining accounts in Singapore on behalf of U.S. taxpayers who were using offshore accounts to evade U.S. taxes and reporting requirements.

    • According to the Plea Agreement, NPA, and documents filed in court today: from Jan. 1, 2010, and continuing until about July 2021, Credit Suisse AG, which had ultra-high-net-worth and high-net-worth individual clients around the globe, conspired with employees, U.S. customers, and others to willfully aid U.S. customers in concealing their ownership and control of assets and funds held at the bank. This enabled those U.S. customers to evade their U.S. tax obligations in several ways, including by opening and maintaining undeclared offshore accounts for U.S. taxpayers at Credit Suisse AG, and providing a variety of offshore private banking services that assisted U.S. taxpayers in the concealment of their assets and income from the IRS and allowed for their continued failure to file FBARs. Among other fraudulent acts, bankers at Credit Suisse falsified records, processed fictitious donation paperwork, and serviced more than $1 billion in accounts without documentation of tax compliance. In doing so, Credit Suisse AG committed new crimes and breached its May 2014 plea agreement with the United States.

    • Between 2014 and June 2023, Credit Suisse AG Singapore held undeclared accounts for U.S. persons, which Credit Suisse AG Singapore knew or should have known were U.S., with total assets valued at over $2 billion. Credit Suisse AG Singapore failed to adequately identify the true beneficial owners of accounts and failed to conduct adequate inquiry about U.S. indicia in the accounts. In 2023, during the post-merger of UBS AG Singapore and Credit Suisse AG Singapore, UBS became aware of accounts held at Credit Suisse AG Singapore that appeared to be undeclared U.S. accounts. UBS froze some of the accounts, voluntarily disclosed information about those identified accounts to the Justice Department and cooperated by undertaking an investigation into the identified accounts.

    • Under today’s resolutions, Credit Suisse Services AG and, by extension, UBS AG, is required to cooperate fully with ongoing investigations and affirmatively disclose any information it may later uncover regarding U.S.-related accounts. The agreements provide no protections for any individuals. Pursuant to the guilty plea and the NPA, Credit Suisse Services AG will pay a total of $510,608,909 in penalties, restitution, forfeiture, and fines.”