Tax

Another Resolution Reached Under US Swiss Bank Programme

Amisha Mehta Assistant Editor London 27 October 2015

Another Resolution Reached Under US Swiss Bank Programme

Piguet Galland & Cie has joined the dozens of Swiss banks avoiding criminal prosecution by entering into an agreement with the US Department of Justice over secret accounts.

Piguet Galland & Cie has reached a non-prosecution agreement under the US Department of Justice’s Swiss Bank Program. The private bank will pay a penalty of $15.365 million.

The Swiss Bank Program, which was introduced in 2013, allows Swiss banks to resolve potential criminal liabilities in the US. Swiss banks were required to advise the Department of Justice by the end of 2013 that they had reason to believe that they had committed tax-related criminal offences in relation to undeclared US-related accounts.

“With each agreement signed under the Swiss Bank Program, we gain a deeper understanding of the historical patterns and practices of entities and individuals around the world facilitating US tax evasion,” said acting assistant attorney general Caroline Ciraolo of the Justice Department’s tax division. 

“We are analysing the information received, pursuing investigations, and remain committed to holding those involved accountable through both civil and criminal enforcement efforts.”

Piguet Galland and its predecessor banks opened, serviced and profited from accounts for US taxpayers with the knowledge that some of these accountholders likely were not complying with their income tax and reporting obligations. Since August 2008, the banks held 337 US-related accounts, with total assets under management of $441 million. They offered various traditional Swiss banking services that they knew or should have known would help US taxpayers hide assets and income from the Internal Revenue Service, the DoJ said.

One particular relationship manager responsible for managing many of the US-related accounts at the bank's predecessors, Banque Franck and later Franck Galland, travelled regularly to the US to attend meetings with existing and potential US clients. Franck Galland also allowed two other former relationship managers to travel to the US to meet with US taxpayer-clients and one of these RMs provided $5,000 in cash from an undeclared account held by a US taxpayer directly to that client in the US.

Among other findings, Franck Galland and Banque Piguet, another predecessor to Piguet Galland, accepted instructions not to disclose the names of US taxpayer-clients to tax authorities, including the IRS. The banks opened and maintained accounts for such clients transferring from other Swiss financial institutions that were closing such accounts, while they knew, or had reason to know, that a portion of the accounts at the other institutions were undeclared.

The latest deal comes a week after Zurich-based BBVA Suiza signed a similar non-prosecution agreement with the department and agreed to pay a penalty of $10.39 million.

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