Legal

US Department Of Justice Settles With Two More Swiss Banks

Eliane Chavagnon Editor Americas 25 August 2015

US Department Of Justice Settles With Two More Swiss Banks

The US Department of Justice, in its vigorous pursuit of hidden offshore accounts, has shaken on deals with Bank Zweiplus and Banca Stato.

Bank zweiplus ag (Bank Zweiplus) and Banca dello Stato del Cantone Ticino (Banca Stato) have reached resolutions under the US Department of Justice’s Swiss bank programme, created to help draw a line under US/Swiss tax wrangles.

“Swiss banks continue to accept responsibility for their involvement in the concealment of foreign assets and the evasion of tax by US accountholders,” said acting assistant attorney general, Caroline Ciraolo, of the DoJ’s tax division. “The banks are paying penalties, making necessary reforms and providing information and cooperation that are enabling the department to hold accountable those individuals that facilitated this misconduct.”

Eligible Swiss banks were required to advise the DoJ by the end of December 2013 that they had reason to believe that they had committed tax-related criminal offences in connection with undeclared US-related accounts. Banks already under criminal investigation related to such activities, and all individuals, were excluded from the programme.

Bank Zweiplus was founded in July 2008 as a retail bank based in Zurich. Its offices in Geneva and Basel, Switzerland, were closed in 2008 and 2012 respectively. Since 1 August 2008, the bank maintained and serviced 44 US-related accounts with an aggregate value of around $12.1 million.

“Bank Zweiplus was aware that US taxpayers have a legal duty to report to the Internal Revenue Service (IRS) their ownership of bank accounts outside the US and to pay taxes on income earned in such accounts,” the DoJ said. “Nevertheless, in disregard of US laws, the bank provided a variety of traditional Swiss banking services that assisted some US taxpayers in concealing their undeclared accounts. For example, Bank Zweiplus maintained numbered accounts and accounts held in the name of structures which were effectively owned or controlled by US persons, including structures in the British Virgin Islands and the Bahamas.”

Bank Zweiplus will pay a penalty of $1.089 million.

Similarly, Banca Stato - established in 1915 and headquartered in Bellinzona, Switzerland - was aware that US taxpayers had a legal duty to report to the IRS and pay taxes on the basis of all of their income, including income earned in accounts that the US taxpayers maintained at the bank. However, it still opened and serviced accounts for US clients that it knew or had reason to know were not complying with their US income tax obligations, the DoJ said.

During the applicable period, Banca Stato maintained and serviced 187 US-related accounts with an aggregate maximum balance of approximately $137 million. It will pay a $3.393 million penalty.

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