Trio Of Swiss Banks Settles With US Justice Department

Amisha Mehta, Assistant Editor, 23 November 2015


Three Swiss banks have avoided criminal liabilities in the US by cooperating with US authorities.

BNP Paribas (Suisse), KBL Switzerland and Bank CIC have signed non-prosescution agreements with the US Department of Justice over secret accounts. They will together pay penalties of more than $81 million.

As part of the department's Swiss Bank Program, the three banks will cooperate in any related criminal or civil proceedings and demonstrate their implementation of controls to stop future misconduct involving undeclared US accounts.

BNPP has had a presence in Switzerland since 1872. The Geneva-headquartered bank offered a range of traditional Swiss banking services that it knew could assist, and did in fact assist, certain US clients to conceal their assets and income from the Internal Revenue Service. In one case, a wealth management relationship manager omitted the existence of a client’s US passport when opening a wealth management account for that client.

Since August 2008, BNPP held and managed around 760 US-related accounts with a peak value of $1.2 billion in assets under management. The bank will pay a penalty of $59.783 million.

Geneva-based KBL Switzerland held significant numbers of US-related accounts, including some accounts for US taxpayers who had been exited from UBS, Credit Suisse or other banks. In one instance, a KBL Switzerland relationship manager assured a US taxpayer client that, because of Swiss bank secrecy laws, Switzerland would not freely exchange account information with the US.

The bank also allowed US taxpayer clients to access and use the value of assets held in undeclared accounts through loans that were secured by their undeclared assets on deposit. Since August 2008, KBL Switzerland maintained 277 US-related accounts with a total value of $255 million. It will pay a penalty of $18.792 million.

Bank CIC, a subsidiary of the French financial group Crédit Mutuel-CIC, has nine branches in Switzerland. The bank also offered Swiss banking services that it knew or should have known helped US clients hide assets and income from the IRS.

Since August 2008, it had 261 US-related accounts, comprising $228 million in assets under management. Bank CIC will pay a penalty of $3.281 million.

“The amount of money associated with each agreement is not insignificant, but even more significant is the amount of ‎data that we will receive as a result of the Swiss Bank Program,” said chief Richard Weber of IRS Criminal Investigation. “At this point, we’ve already learned so much about the formerly hidden world of offshore banking. This information enables us to vigorously pursue non-compliant individual US taxpayers and guides us in the development of innovative partnerships and methodologies to combat a wide variety of international tax evasion techniques.”

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