The Swiss bank has been charged with conspiring to help US taxpayers hide their assets from the Internal Revenue Service and evade tax.

Julius Baer has agreed to pay a penalty of $547 million after admitting to helping American clients hide billions of dollars in offshore accounts.

Zurich-headquartered Julius Baer admitted to its actions in a detailed statement and US prosecutors agreed to drop charges after three years if the bank abides by the terms of the deal.

In addition, two of the bank's client advisors, Daniela Casadei and Fabio Frazzetto, pleaded guilty to felony tax charges. The pair had been fugitives since 2011 when they were originally charged.

“The resolution with Bank Julius Baer and the guilty pleas entered by two bank employees reflect the department’s continued commitment to hold accountable those financial institutions who conspired with US taxpayers to conceal assets abroad and evade US tax obligations, as well as those individuals responsible for such crimes,” said acting assistant attorney general Caroline Ciraolo of the Justice Department’s tax division. 

“Bank Julius Baer not only turned a blind eye to tax avoiders, but actually conspired with them to break the law,” said US attorney Preet Bharara. “Together with our partners at the IRS, we will continue to prosecute financial institutions and individuals who facilitate tax evasion.”

From at least the 1990s through 2009, Julius Baer helped many of its US taxpayer-clients evade tax, file false federal tax returns with the IRS and hide accounts held at the bank from the IRS, the Justice Department said. It added that Julius Baer had a long tradition of bank secrecy and no longer had offices in the US, making it less vulnerable to pressure from US law enforcement authorities than other Swiss banks with a presence in the country.

Among its actions, Julius Baer used “code word agreements” with US taxpayer clients under which it agreed not to identify them by name within the bank or on bank documents. At its “high-water mark” in 2007, Julius Baer had $4.7 billion in assets under management relating to 2,589 undeclared accounts held by US taxpayer-clients. From 2001 through 2011, the bank earned $87 million in profit on $219 million gross revenues from its undeclared US taxpayer accounts.

“Being able to close this regrettable legacy issue is an important milestone for Julius Baer. The settlement ends a long period of uncertainty for us and all our stakeholders. This resolution allows us now to again fully focus on the future and our business activities,” said Julius Baer's chief executive, Boris Collardi, in a separate statement. 

Late last month, the US Justice Department reached its final non-prosecution agreement under the Swiss Bank Program, through which it imposed $1.36 billion in penalties on 80 banks.