French prosecutors said that Credit Suisse has agreed to pay 238 million euros ($234 million) to settle tax fraud allegations, the latest blow for the embattled Swiss bank
AP | Paris
Last Updated at October 24, 2022
Photo: Bloomberg
French prosecutors said Monday that Credit Suisse has agreed to pay 238 million euros (USD 234 million) to settle tax fraud allegations, the latest blow for the embattled Swiss bank.
The bank will pay 123 million euros in fines and 115 million in damages and interest to France, whose investigators will close an inquiry launched in 2016 on possible charges of aggravated tax fraud laundering and illegal soliciting, French prosecutor Jean-Franois Bohnert said in a statement.
French media have reported that Credit Suisse representatives courted wealthy French customers to persuade them to open accounts with the bank that weren't declared to French tax authorities.
Credit Suisse says it doesn't acknowledge criminal liability in the settlement.
The bank is pleased to resolve this matter, which marks another important step in the proactive resolution of litigation and legacy issues," the company said in a statement.
It comes just a week after Credit Suisse agreed to pay USD 495 million in a U.S. settlement over a yearslong dispute tied to mortgage-backed securities, an investment vehicle that played a central role in the 2008 financial crisis.
The settlements are just the latest of a string of woes for Credit Suisse, including bad bets on hedge funds and a spying scandal involving UBS.
A Swiss court fined the bank more than USD 2 million in June for failing to prevent money laundering linked to a Bulgarian criminal gang more than 15 years ago.
CEO Thomas Gottstein announced in July that he was resigning after 2 1/2 years in the job as the bank posted a net loss of 1.6 billion Swiss francs (about USD 1.7 billion) in the second quarter.
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Credit Suisse reaches €238m settlement to resolve French legacy case
The agreement with the Parquet National Financier (PNF) will resolve a legacy investigation into Credit Suisse’s role in helping clients in France to avoid paying taxes on their wealth, between 2005 and 2012
Credit Suisse headquarters in Zürich (Credit: Roland zh/Wikipedia)
Swiss investment bank Credit Suisse has reached €238m settlement with France, which resolves a legacy tax fraud and money laundering case against the bank.
The bank has signed an agreement with the Parquet National Financier (PNF), a judicial institution in France responsible for tracking down economic and financial crime.
Under the terms of the agreement, Credit Suisse will pay a public interest fine comprising a profit disgorgement of €65.6m, an additional amount of €57.4m, and €115m in damages to the French State.
The agreement will terminate an investigation into the Swiss bank’s role in helping the clients in France to avoid paying taxes on their wealth.
The alleged scheme, which took place in several countries between 2005 and 2012, caused fiscal damage of more than €100m to the French state, reported Reuters.
Credit Suisse, in its statement, said: “The settlement does not comprise a recognition of criminal liability. The bank is pleased to resolve this matter, which marks another important step in the proactive resolution of litigation and legacy issues.”
Earlier this month, Credit Suisse reached a $495m settlement to resolve legacy cases related to its Residential Mortgage-Backed Securities (RMBS) business in the US.
The Swiss investment bank has signed the agreement with the New Jersey Attorney General (NJAG), to resolve claims related to more than $10bn of RMBS.
The settlement is said to end the bank’s largest outstanding RMBS litigation case, filed in 2013, while five other cases are continuing at various stages.
NJAG alleged that Credit Suisse had misled investors and engaged in fraud with respect to the offer and sale of RMBS, and claimed more than $3bn in damages.
The remaining cases are expected to be resolved in the coming six months, and cost a total of less than $100m, reported Reuters.
Furthermore, the bank failed to prevent money laundering by a Bulgarian cocaine trafficking gang, and several cases are pending in Bermuda, Singapore, and other countries.
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