CRIMINAL CAPITALI$M
US: Credit Suisse violates deal on rich clients' tax evasionJAMEY KEATEN and COURTNEY BONNELL Associated Press
Mar 29, 2023 U
Swiss bank UBS announced plans to acquire its smaller rival Credit Suisse in a deal for $3.25 billion dollars.
GENEVA — Credit Suisse violated a plea agreement with U.S. authorities by failing to report secret offshore accounts that wealthy Americans used to avoid paying taxes, U.S. lawmakers said Wednesday, releasing a two-year investigation that detailed the role employees at the embattled Swiss bank had in aiding tax evasion by clients.
The U.S. Senate Finance Committee pointed to an ongoing, possibly criminal conspiracy tied to nearly $100 million in accounts belonging to a family of American taxpayers that the bank did not disclose. It also said Credit Suisse helped a U.S. businessman hide more than $220 million in offshore accounts from the IRS.
Credit Suisse revealed that it had found 23 accounts each worth more than $20 million that were not declared to tax authorities, many of them unveiled just days before the report was released, according to the committee. It said its findings show that more than $700 million was concealed in violation of the bank's 9-year-old plea deal with the U.S. Justice Department.
GENEVA — Credit Suisse violated a plea agreement with U.S. authorities by failing to report secret offshore accounts that wealthy Americans used to avoid paying taxes, U.S. lawmakers said Wednesday, releasing a two-year investigation that detailed the role employees at the embattled Swiss bank had in aiding tax evasion by clients.
The U.S. Senate Finance Committee pointed to an ongoing, possibly criminal conspiracy tied to nearly $100 million in accounts belonging to a family of American taxpayers that the bank did not disclose. It also said Credit Suisse helped a U.S. businessman hide more than $220 million in offshore accounts from the IRS.
Credit Suisse revealed that it had found 23 accounts each worth more than $20 million that were not declared to tax authorities, many of them unveiled just days before the report was released, according to the committee. It said its findings show that more than $700 million was concealed in violation of the bank's 9-year-old plea deal with the U.S. Justice Department.
“Credit Suisse got a discount on the penalty it faced in 2014 for enabling tax evasion because bank executives swore up and down they’d get out of the business of defrauding the United States,” said Sen. Ron Wyden, the Democratic chairman of the committee.
“This investigation shows Credit Suisse did not make good on that promise, and the bank’s pending acquisition does not wipe the slate clean,” he said.
The Swiss government pressed for a $3.25 billion takeover of long-troubled Credit Suisse by rival bank UBS this month amid turmoil in the global financial system. The collapse of two U.S. banks ignited wider fears that sent shares of Switzerland’s second-largest bank tumbling as customers withdrew their money.
The Senate findings pose new problems for UBS as it tries to absorb Credit Suisse and create a single Swiss megabank, coming the same day that UBS named a new CEO to help push through the takeover. It's also Credit Suisse's latest run-in with U.S. authorities, following settlements worth hundreds of millions of dollars over mortgage-backed securities that were behind the 2008 financial crisis.
Credit Suisse, whose yearslong troubles range from hedge fund losses to fines for failing to prevent money laundering by a Bulgarian cocaine ring, said it “does not tolerate tax evasion” and insisted that the Senate report described “legacy issues” — some dating to a decade ago — that have been addressed since
“We have implemented extensive enhancements since then to root out individuals who seek to conceal assets from tax authorities,” the Zurich-based bank said.
“Our clear policy is to close undeclared accounts when identified and to discipline any employee who fails to comply with bank policy or falls short of Credit Suisse’s standards of conduct,” it said.
UBS said it has assessed outstanding lawsuits and investigations as part of the Credit Suisse acquisition and expects the deal to be beneficial for shareholders. It's working to close the sale and get approval from regulators in the coming weeks or months.
The Senate report noted Credit Suisse’s cooperation with the investigation, including having appointed new leadership.
The Swiss lender paid a discounted fine of $1.3 billion to the U.S. Justice Department after pleading guilty in 2014 to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the IRS.
The bank acknowledged “knowingly and willfully” helping thousands of Americans open accounts that weren't declared to tax authorities and concealing offshore assets. It avoided criminal charges in exchange for agreeing to report undeclared accounts and provide other information to U.S. officials.
The Senate committee said secret offshore accounts belonging to a family of dual U.S.-Latin American citizens and worth nearly $100 million were closed in 2013 but the money was transferred to other banks without telling U.S. authorities.
With that maneuver, "Credit Suisse enabled what appears to be potentially criminal tax evasion by a client to go undetected for almost a decade," the report says.
The committee said former senior bankers helped manage that family's accounts. In addition, Credit Suisse employees helped a U.S. businessman hide $220 million from U.S. authorities despite long knowing he was an American, according to the report, which said whistleblowers flagged the scheme after the plea deal.
Credit Suisse workers were incentivized to help accounts hide U.S. ties because their bonuses depend on the amount of money being managed, the report said. To that end, employees who had clients with assets above $20 million or $30 million may have given those accounts special consideration because it would mean they got larger bonuses, the committee said.
Investigators say bankers figured out how to code accounts for Americans who possess dual citizenship. Those bankers would use the non-U.S. passport of wealthy individuals to evade internal systems designed to look for identifying marks in U.S. passports.
FOX BACK IN HEN HOUSE
Sergio Ermotti back as UBS chief for Credit Suisse takeoverBy AFP
March 29, 2023
Banking giant UBS is bringing back Sergio Ermotti as CEO
- Copyright Metro Nashville Police Department/AFP Handout
Nathalie OLOF-ORS
Sergio Ermotti will return as CEO of Swiss banking giant UBS to pilot the controversial acquisition of troubled rival Credit Suisse, its board announced Wednesday.
Ermotti spent nine years restoring UBS’s reputation after its bailout by the Swiss government and the central bank during the 2008 global financial crisis, as well as the $2.3 billion in losses racked up by a rogue trader in 2011.
He is due to take over on April 5 from current boss Ralph Hamers, who has agreed to step down but will remain at his side during a transition period.
“The task at hand is an urgent and challenging one. In order to do it in a sustainable and successful way, and in the interest of all stakeholders involved, we need to thoughtfully and systematically assess all options,” Ermotti said in a statement from the board.
The marriage of UBS and Credit Suisse was hastily arranged by the government to prevent a global financial meltdown following fears of contagion from the collapse of three US regional banks.
The central bank has since admitted that the size of the resulting megabank could cause domestic problems in Switzerland.
UBS was already the biggest bank in the country — and will now become even larger after swallowing up the second-most important bank in the wealthy Alpine nation.
Switzerland, whose vibrant banking scene is a key part of the country’s culture, has been shocked to the core by the enforced merger.
A recent poll showed a majority of Swiss people reject the deal and blame Credit Suisse’s leadership for the outcome.
Swiss financial regulator FINMA is probing how to hold Credit Suisse bosses to account.
The Swiss parliament is planning a special session on Credit Suisse in April. It is also exploring whether to create an investigative committee to determine who was responsible for the debacle.
– Checkered past –
Credit Suisse was already embroiled in a series of scandals when its shares crashed on March 15 after the chairman of Saudi National Bank, its main shareholder, said his group would not up its stake in the Swiss lender.
A $54-billion lifeline from the central bank was not enough to stop the panic and the government brokered the weekend deal with UBS on March 19.
UBS and Credit Suisse were both among the 30 banks around the world deemed too big to fail and therefore considered Global Systemically Important Banks.
Credit Suisse was undergoing major restructuring before the takeover to repair trust after the implosion of the US fund Archegos in 2021, which cost the lender more than $5 billion.
That same year, its asset management branch was rocked by the bankruptcy of British financial firm Greensill, in which some $10 billion had been committed through four funds.
Sergio Ermotti will return as CEO of Swiss banking giant UBS to pilot the controversial acquisition of troubled rival Credit Suisse, its board announced Wednesday.
Ermotti spent nine years restoring UBS’s reputation after its bailout by the Swiss government and the central bank during the 2008 global financial crisis, as well as the $2.3 billion in losses racked up by a rogue trader in 2011.
He is due to take over on April 5 from current boss Ralph Hamers, who has agreed to step down but will remain at his side during a transition period.
“The task at hand is an urgent and challenging one. In order to do it in a sustainable and successful way, and in the interest of all stakeholders involved, we need to thoughtfully and systematically assess all options,” Ermotti said in a statement from the board.
The marriage of UBS and Credit Suisse was hastily arranged by the government to prevent a global financial meltdown following fears of contagion from the collapse of three US regional banks.
The central bank has since admitted that the size of the resulting megabank could cause domestic problems in Switzerland.
UBS was already the biggest bank in the country — and will now become even larger after swallowing up the second-most important bank in the wealthy Alpine nation.
Switzerland, whose vibrant banking scene is a key part of the country’s culture, has been shocked to the core by the enforced merger.
A recent poll showed a majority of Swiss people reject the deal and blame Credit Suisse’s leadership for the outcome.
Swiss financial regulator FINMA is probing how to hold Credit Suisse bosses to account.
The Swiss parliament is planning a special session on Credit Suisse in April. It is also exploring whether to create an investigative committee to determine who was responsible for the debacle.
– Checkered past –
Credit Suisse was already embroiled in a series of scandals when its shares crashed on March 15 after the chairman of Saudi National Bank, its main shareholder, said his group would not up its stake in the Swiss lender.
A $54-billion lifeline from the central bank was not enough to stop the panic and the government brokered the weekend deal with UBS on March 19.
UBS and Credit Suisse were both among the 30 banks around the world deemed too big to fail and therefore considered Global Systemically Important Banks.
Credit Suisse was undergoing major restructuring before the takeover to repair trust after the implosion of the US fund Archegos in 2021, which cost the lender more than $5 billion.
That same year, its asset management branch was rocked by the bankruptcy of British financial firm Greensill, in which some $10 billion had been committed through four funds.
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