The list of Swiss financial organisations signing NPAs with the US over secret accounts grew even longer this week as another firm sought to put a line under past transgressions.

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.

The US Department of Justice has announced that Schroder & Co. Bank has reached a resolution under the department’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.

In March, Schroders said that it, along with around 100 other financial bodies, was entering the program. “We have now reached agreement with the US Department of Justice on this matter which relates to their Swiss Bank Program. We have invested and will continue to invest considerable resources in systems to support the increasing demands of enhanced international tax reporting," a spokesperson for the firm told Family Wealth Report.

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

Under the terms of the NPA, Schroder Bank agrees to cooperate in any related criminal or civil proceedings, 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 offenses.

Schroder Bank was founded in 1967 and received its Swiss banking license in 1970. Since 1984, Schroder Bank has opened a branch in Geneva.  The bank has two wholly-owned subsidiaries, Schroder Trust AG (domiciled in Geneva) and Schroder Cayman Bank & Trust Company Ltd. (domiciled in George Town, Grand Cayman).  Schroder Cayman Bank & Trust Company Ltd. provides services to clients including the creation and support of trusts, foundations and other corporate bodies.  Both subsidiaries 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 AG and Schroder Cayman Bank & Trust Company Ltd.

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 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 yesterday.

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