Credit Suisse pleads guilty to criminal charge in DOJ tax investigation

[JURIST] Swiss bank Credit Suisse [corporate website] pleaded guilty Monday to a criminal charge for its role in helping Americans avoid taxes, according to a speech [text] from US Attorney General Eric Holder [official website]. Credit Suisse will pay a $2.5 billion financial penalty to the Department of Justice (DOJ), the Internal Revenue Service (IRS), the Federal Reserve and the New York State Department of Financial Services to settle the claim. Credit Suisse reached [press release] a $196 million settlement with the Securities Exchange Commission (SEC) [official website] this past February on the same charge. According to Holder a DOJ investigation discovered that Credit Suisse and its subsidiaries "actively helped its account holders to deceive the IRS by concealing assets and income in illegal, undeclared bank accounts...held in the names of sham entities and foundations." In his speech Holder warned international banking institutions stating, "when a bank engages in misconduct this brazen, it should expect that the Justice Department will pursue criminal prosecution to the fullest extent possible, as has happened here." Credit Suisse is the largest bank to plead guilty to a criminal charge in 20 years.

Credit Suisse has faced a number of legal challenges in the years following the 2008 financial crisis. In 2012 the Swiss Federal Administrative Court (FAC) [official website, in German] ruled [JURIST report] that Switzerland is not permitted to give the IRS a Credit Suisse client's account information. In 2009 Credit Suisse agreed [JURIST report] to pay more than $500 million in fines to both the US government and New York state for violating US sanctions against Iran and other countries. Also in 2009 former Credit Suisse brokers Eric Butler and Julian Tzolov were convicted [JURIST report] of multiple counts of fraud and conspiracy after defrauding clients out of more than $400 million by selling high-risk, mortgage-backed securities to clients who requested low-risk investments.

 

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