- Credit Suisse Services AG struck a deal with U.S. regulators that will see it pay a total of $511 million, including forfeitures, after it pleaded guilty to conspiring to hide billions in offshore accounts held by wealthy U.S. tax evaders. This is the second deal in 11 years for Credit Suisse, after it pleaded guilty in 2014 for helping high-net-worth U.S. clients hide money from the IRS. The bank merged with UBS Group AG in May 2024.
A services unit of Credit Suisse pleaded guilty and was sentenced on Monday in a long-running scheme that hid wealthy U.S. accounts from authorities, according to the Department of Justice.
Between 2010 and July 2021 Credit Suisse AG plotted with its employees and ultra-rich U.S. account holders to conceal the money and assets they held at the Swiss bank, authorities said. In turn, this allowed the bank’s U.S. clients to allegedly avoid paying taxes while Credit Suisse helped the scheme along by providing private banking services, according to the plea agreement.
“Among other fraudulent acts, bankers at Credit Suisse falsified records, processed fictitious donation paperwork, and serviced more than $1 billion in accounts without documentation of tax compliance,” DOJ said in a statement.
The plea harkens to the Swiss bank’s 2014 deal with authorities, which saw Credit Suisse penalized to the tune of $2.6 billion for aiding and assisting U.S. taxpayers in filing false returns. That agreement required Credit Suisse to implement programs to ensure it was complying with U.S. laws. Authorities on Monday said in the intervening years since, Credit Suisse had “committed new crimes and breached its May 2014 plea agreement with the United States.”
Between 2014 and June 2023, Credit Suisse AG Singapore held undeclared accounts for wealthy Americans, with cash and assets valued at more than $2 billion, authorities said. In 2023, after Credit Suisse and UBS began the process of merging, UBS discovered the accounts with Credit Suisse AG Singapore. UBS froze them, undertook an investigation, and disclosed information to the DOJ. In a statement, UBS said it expects to get a financial credit for its cooperation.
The Swiss banking giant celebrated the resolution of what it called “another of Credit Suisse’s legacy issues” on Monday.
“UBS was not involved in the underlying conduct and has zero tolerance for tax evasion,” the bank said in a statement. UBS, itself, entered into a deferred prosecution agreement with U.S. regulators in 2009 on charges of conspiring to defraud the U.S. by impeding IRS collection. The bank agreed to pay $780 million in fines, penalties, interest, and restitution.
According to the Securities & Exchange Commission, UBS has about $6.2 trillion in assets globally, and $2 trillion were managed in the U.S. as of Sept. 30, 2024. In its annual report this year, UBS Group management concluded there was a material weakness in internal controls over its financial reporting at the end of 2024 due to issues with Credit Suisse.
UBS said that even though Credit Suisse was no longer a separate legal entity, many of its booking, accounting, and risk management systems were still in use. Given that in 2024, migration efforts were still ongoing, “management has concluded that there is a material weakness in internal control over financial reporting at 31 December 2024,” UBS said in its annual report.
This story was originally featured on Fortune.com
