Bank Pleads Guilty To Helping U.S. Taxpayers Hide Offshore Accounts From The IRS

Posted On Wednesday, May 21, 2014

On Monday, Credit Suisse AG pleaded guilty to conspiracy to aid and assist the filing of false income tax returns.  The plea agreement provides that Credit Suisse will pay $2.6 billion to federal and state authorities, the largest payment ever in a criminal tax enforcement action. 

As part of the plea agreement, Credit Suisse acknowledged that it knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts to conceal their offshore assets and income from the IRS.  Specifically, Credit Suisse: (1) helped clients use sham entities to hide undeclared accounts; (2) solicited IRS forms that falsely stated that the sham entities were the beneficial owners of the assets in the accounts; (3) failed to maintain records in the U.S. related to the accounts and destroyed account records sent to the United States; (4) facilitated the withdrawal of funds from these undeclared accounts by either providing hand-delivered cash or using correspondent bank accounts in the U.S.; (5) structured fund transfers to evade currency transaction reporting requirements; and (6) provided offshore credit and debit cards to repatriate funds in the undeclared accounts.

Officials from the DOJ and IRS have lauded the investigation and resultant guilty plea, stating “[this] guilty plea is just the latest effort by the department to slam the door shut on undeclared bank accounts, phony trusts and other foreign schemes used by U.S. taxpayers to evade taxes . . . “[w]e will continue to hold to account the bankers, the brokers and other professionals in Switzerland and around the world as well as the institutions that trained and directed them to use bank secrecy laws to protect U.S. tax cheats.”

The case against Credit Suisse also produced indictments of eight Credit Suisse executives in 2011.  Of the eight, mostly former Credit Suisse bankers and managers, two have already pleaded guilty to conspiring to defraud the IRS. 

Given the magnitude of the payment and the rhetoric from the DOJ, this plea agreement appears to signal the Department’s emphasis on enforcement against institutions that it views as facilitating fraud on the government.