Two Cayman Islands-based financial firms, Cayman National Securities and Cayman National Trust, have pleaded guilty in Manhattan Federal Court to conspiring to help US taxpayers hide more than $130m in offshore bank accounts from the US Internal Revenue Service (IRS).

The two companies, which are subsidiaries of the Cayman National Corporation, provide investment brokerage and trust management services to individuals and entities within and outside the Cayman Islands.

Under the plea agreements, the companies have to pay a total of $6m in financial penalties and produce account files of non-compliant US taxpayers who had accounts with CNS and CNT.

According to the Justice Department, the Cayman-based firms earned more than $3.4m in gross revenues from undeclared US taxpayer accounts between 2001 and 2011.

In 2009, the two units managed about $137m of US client assets under management in undeclared accounts.

Prosecutors said that CNS and CNT opened and or encouraged US taxpayer-clients to open accounts in the name of sham Caymanian companies and trusts.

The subsidiaries treated these sham Caymanian structures as the account holders, allowed the real owners to trade in US securities and failed to disclose their identities to the IRS.

US authorities said the sham structures included trusts, which were nominally controlled by the Cayman National affiliates officers but were in fact controlled by the US taxpayers.

As part of their guilty pleas, the two financial firms have made substantial efforts to cooperate with the probe by facilitating interviews that the office conducted of CNS and CNT employees, producing documents and by responding to treaty requests.

US Attorney for the Southern District of New York Preet Bharara said: "The guilty pleas of these two Cayman Island companies today represent the first convictions of financial institutions outside Switzerland for conspiring with U.S. taxpayers to evade their lawful and legitimate taxes.

"The plea agreements require these Cayman entities to provide this office with the client files, because we are committed to finding and prosecuting not only banks that help U.S. taxpayers evade taxes, but also individual taxpayers who find criminal ways not to pay their fair share."