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Credit Suisse Goes To Mattresses Over Tax Evasion
Photo Credit: Forbes Business

Credit Suisse Goes To Mattresses Over Tax Evasion

Feb 25 2014, 3:42am CST | by

There are growing expectations that Credit Suisse and the U.S. Justice Department must be close to settling the bank’s role in helping Americans evade taxes. The bank’s CEO Brady Dougan and three...

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21 weeks ago

Credit Suisse Goes To Mattresses Over Tax Evasion

Feb 25 2014, 3:42am CST | by

There are growing expectations that Credit Suisse and the U.S. Justice Department must be close to settling the bank’s role in helping Americans evade taxes. The bank’s CEO Brady Dougan and three other execs (General Counsel Romeo Cerutti, private banking and wealth management co-heads Hans-Ulrich Meister and Robert Shafir) face Sen. Carl Levin’s Permanent Senate Subcommittee on Investigations February 26. The grilling is part of the continuing quest for answers exactly how Credit Suisse and other banks so systemically and calculatedly aided American depositors.

It is unlikely to be an Apple computer love-fest similar to the one finessed by CEO Tim Cook. Still, the Senate scrutiny is distinct from the harsher DOJ talks that could yield a deal expected by many to cost the bank in excess of $800 million. That may seem to be a high price but it is still cheap compared to indictment and prosecution. Credit Suisse is one of 14 Swiss banks ineligible for what amounts to an IRS get out of jail free card.

UBS was the pioneer at striking a deal with the U.S. It famously made its deferred-prosecution deal in 2009, turning over thousands of names of American depositors and paying $780 million in fines. That launched a raft of IRS disclosure initiatives netting the U.S. billions in taxes and penalties. But the parade of sheepish Swiss banks remains.

Numerous other banks are taking an IRS deal that means full disclosure of American accounts and tiers of fines depending on how aggressively the banks behaved. The deal was not offered to the 14 Swiss banks under the dark cloud of U.S. investigation. That means criminal indictments and even corporate death remain possible for some of the 14.

After all, Wegelin & Co. pleaded guilty to conspiring to hide more than $1.2 billion from the IRS. It was ordered to pay over $57 million in restitution and fines and closed its centuries old doors. The stakes remain high enough that Valiant Holding, Berner Kantonalbank, and Vontobel Holding AG were the first banks to accept the harsh deal last year.

In all, a whopping 106 Swiss institutions took the IRS deal by the Dec. 31, 2013, deadline. The experience of UBS, Wegelin and Bank Frey suggest that resistance is expensive or futile. But Credit Suisse and 13 other banks are ineligible for the deal, and the pressure on Credit Suisse is palpable.

In 2011, the U.S. had already indicted  several current and former Credit Suisse bankers. And there seems little doubt that the feds expect the Credit Suisse deal to exceed the value of the $780 million deal done by UBS 5 years ago. And for Credit Suisse, the hits just keep coming.

Only last week Credit Suisse agreed to pay the SEC $196.5 million over providing cross-border brokerage and investment advisory services to U.S. clients without registration. And under the SEC’s new harsh regime, Credit Suisse is admitting wrongdoing too. Still, all of this seems small potatoes compared to the tax evasion beef that has roiled the country and nearly all of its institutions for more than half a decade.

There will be more and more probes into accounts and institutions that once seemed supremely secure. Once protected by custom and by inviolate Swiss bank secrecy, everything is different now. Indeed, we even have the global embrace of FATCA with its sea change to the face of worldwide financial transparency.

You can reach me at Wood@WoodLLP.com . This discussion is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.

Source: Forbes Business

 
Update
10

6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

Cambodia's Famous Battambang Circus
KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was told tod ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
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7 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

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7 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

Federal Aviation Administration Bans All US Flights To Israel
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by ...
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Update
7

7 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammuddin Hussein ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

7 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states last m ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

7 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in compe ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

7 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Dat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an all ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Scheme 2 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Daman ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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