Washington: European bank Credit Suisse AG pleaded guilty on Monday to helping wealthy Americans avoid paying taxes through secret offshore accounts and agreed to pay about $2.6 billion.
The US justice department said that it was the largest penalty imposed in any criminal tax case. Credit Suisee is the largest bank to plead guilty in more than 20 years.
The settlement resolves a years-long criminal investigation into allegations that Credit Suisse, Switzerland’s second-largest bank, recruited US clients to open Swiss accounts, helped them conceal the accounts from the Internal Revenue Service, the US tax collection agency and enabled misconduct by bank employees.
The case is part of the Obama administration’s crackdown on foreign banks believed to be helping US taxpayers hide assets.
Officials said that a criminal charge was necessary to account for the bank’s pattern of misconduct, which included a lack of cooperation and document destruction. But the deal was structured in such a way as to allow the bank to continue operating.
The penalties will be paid to the justice department, the US Federal Reserve and the New York State Department of Financial Services.
US Attorney General Eric Holder, criticized last year, after telling US Congress that large banks had become hard to prosecute, appeared to foreshadow the guilty plea in a video message earlier this month in which he said no financial institution was “too big to jail.”
“A company’s profitability or market share can never and will never be used as a shield from prosecution or penalty,” Mr Holder told a news conference.
“And this action should put that misguided notion definitively to rest.”
As part of its plea agreement, Credit Suisse acknowledged that it helped clients use sham entities to hide undeclared accounts; destroyed bank records and concealed transactions involving undeclared accounts.
The case was filed in federal court in suburban Alexandria, Virginia, where eight former Credit Suisse employees have been charged. Two have pleaded guilty.
Credit Suisse chief executive Brady Dougan, who has said previously that senior executives at the bank were not aware that some bankers were helping US customers evade taxes, said in a statement on Monday that the bank regrets its past “misconduct” and was looking to resolve the matter and move forward.
The bank has said it stopped providing private banking services outside the US to Americans several years ago.
The criminal case follows a Senate subcommittee investigation that found the bank provided accounts in Switzerland for more than 22,000 US clients totaling $10 billion to $12 billion.
