A Swiss private bank, part of UK-listed Schroders, has become the latest firm to draw a line with the US under undisclosed offshore accounts.

Schroder & Co Bank, a Swiss business of UK-listed Schroders, has become the latest financial institution to sign a non-prosecution agreement with US legal authorities over secret accounts. The bank will pay a $10.354 million penalty.

Schroder & Co Bank reached a resolution under the Department of Justice’s Swiss Bank Program. Dozens of Swiss banks have reached similar deals, signing NPAs and paying fines in exchange for drawing a line under a long-running wrangle over offshore accounts.

The programme, which was announced two years ago, enables Swiss banks to resolve potential criminal liabilities in the US.  Swiss banks eligible to enter the programme were required to advise the department by 31 December 2013 that they had reason to believe that they had committed tax-related criminal offences in connection with undeclared US-related accounts. Banks and individuals already under criminal investigation related to their Swiss-banking activities were expressly excluded from the programme.

Under the terms of the NPA, Schroder & Co Bank agrees to cooperate in any related criminal or civil proceedings, to demonstrate its implementation of controls to stop misconduct involving undeclared US accounts and pay penalties in return for the department’s agreement not to prosecute the bank for tax-related criminal offences.

The bank was founded in 1967 and received its Swiss banking licence in 1970. Since 1984, Schroder Bank has had a branch in Geneva. The bank has two wholly-owned subsidiaries, Schroder Trust (domiciled in Geneva) and Schroder Cayman Bank & Trust Company (domiciled in George Town, Grand Cayman). Schroder Cayman Bank & Trust Company provides services to clients such as the creation and support of trusts, foundations and other corporate bodies. Both subsidiaries also acted in some cases as an account signatory for entities holding an account with the bank. Schroder Bank is in the process of closing the operations of Schroder Trust and Schroder Cayman Bank & Trust Company.

Schroder Bank opened accounts for trusts and companies owned by trusts, foundations and other corporate bodies established and incorporated under the laws of the British Virgin Islands, the Cayman Islands, Panama, Liechtenstein and other non-US jurisdictions, where the beneficiary or beneficial owner named on the "Form A" was a US citizen or resident.  

In addition, a small number of accounts were opened for US limited liability companies with US citizens or residents as members, as well as for US LLCs with non-US persons as members.  

Schroder Bank communicated directly with the beneficial owners of some accounts of trusts, foundations or corporate bodies, and it arranged for the issuance of credit cards to the beneficial owners of some such accounts that appear in some cases to have been used for personal expenses, the DoJ said in a statement last week.

Schroder Bank also processed cash withdrawals in amounts exceeding $100,000 or the Swiss franc equivalent. For at least three US-related accounts, a series of withdrawals that in aggregate exceeded $1 million were made. In addition, at least 26 US-related accountholders received cash or checks in amounts exceeding $100,000 on closure of their accounts, including in at least three cases cash or checks in excess of $1 million, the DoJ said.

Between 2004 and 2008, four Schroder Bank employees traveled to the US in connection with the bank’s business regarding US-related accounts.  

Since 1 August 2008, Schroder Bank had 243 US-related accounts with approximately $506 million in assets under management.