Swiss banks Bank J. Safra Sarasin, Coutts & Co, Gonet & Cie and Banque Cantonal du Valais (BC Valais) have reached resolutions with the US Department of Justice (DoJ) over the tax evasion cases under the department’s Swiss bank programme.
The banks have collectively agreed to pay penalties totalling over $178m to avoid prosecution over allegations accusing them of helping Americans evade taxes.
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As per the terms of the non-prosecution agreements, the banks have agreed to cooperate in any related criminal or civil proceedings and demonstrate implementation of controls to prevent misconduct.
The $178m penalty includes $85.8m from Safra Sarasin, $78.5m from Coutts & Co in Zurich, $11.5m from Gonet & Cie in Geneva and $2.3m from Banque Cantonal du Valais in Canton of Valais, Switzerland, the Justice Department said.
The US DoJ in a statement added that Safra Sarasin maintained 1275 US related accounts with an aggregate value of about $2.2bn since 1 August 2008.
The bank assisted US clients with structured accounts to create an entity, such as a Liechtenstein foundation, a Panama corporation or a British Virgin Islands corporation, and pay a fee to third parties to act as corporate directors.
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By GlobalDataAlso, relationship managers at Safra and Sarasin met the US taxpayer beneficial owner of an offshore structure account, instead of the directors or other authorized parties on the account. Few relationship managers worked together with corporate service providers, including Swiss lawyers, to help US taxpayers in setting up nominee entities for their undeclared accounts.
The banks has transferred 20% of the funds in US related accounts to banks in countries other than Switzerland and the US, including Israel, Hong Kong and Liechtenstein. Several US related accounts held at Sarasin were managed by external asset managers.
Coutts managed 1,337 US related accounts, which included both declared and undeclared accounts, with assets under management of about $2.1bn since 1 August 2008.
According to DoJ, Coutts relationship managers travelled to the US to meet with clients, including three relationship managers employed by other group entities located outside of Switzerland who made 11 trips to the US.
Coutts helped US clients to avoid taxes by placing their assets in the names of structures formed, maintained and managed by various subsidiary trust companies of Coutts, which provided structuring services to its clients. The bank’s relationship managers worked with external trust companies to create and administer offshore structures for its US clients.
Gonet, a Geneva -based private bank, held 150 US related accounts with an aggregate value of about $254.5m since 1 August 2008.
The bank opened accounts for US taxpayers who had left other Swiss banks including UBS and Credit Suisse. It also maintained US related accounts held by non US entities.
The bank’s staff had provided US clients with referrals to external advisors who could assist with the creation and management of an entity such as a Liechtenstein foundation, Panamanian corporation or British Virgin Islands corporation.
Valais-based BC Valais provides banking services to support the development of the regional economy and to provide credit services to residents of the Canton of Valais.
BC Valais held 185 US related accounts with a maximum aggregate value of approximately $72m since 1 August 2008. The bank signed a QI Agreement with the IRS.
Justice Department tax division acting assistant attorney general Caroline Ciraolo said: "With today’s resolutions under the Swiss Bank Program, the department has reached agreements with 75 Swiss banks, imposed penalties in excess of $1 billion, and secured voluminous and detailed information regarding the illegal conduct of financial institutions, professionals and accountholders around the world."
