Topline
Banque Pictet, a Swiss private bank, entered a deferred prosecution agreement with federal prosecutors on Monday—admitting to helping Americans hide $5.6 billion from the IRS in 1,637 secret accounts, a violation of U.S. tax law.
Banque Pictet has agreed to pay $122.9 million in fines and restitution to the federal government.
Key Facts
According to prosecutors, Banque Pictet opened secret bank accounts for U.S. customers as “numbered” or “pseudonym” accounts—ensuring they would not be identified by tax authorities.
Prosecutors estimate the bank helped their clients avoid $50.6 million in taxes between 2008 and 2014, and the Justice Department has since charged Banque Pictet with conspiracy to defraud the IRS.
The deal was announced at a hearing in Manhattan Federal Court on Monday, where the bank agreed to a deferred prosecution deal in exchange for cooperation in future investigations into U.S. related bank accounts.
Banque Pictet agreed to pay nearly $32 million in restitution and a fine of nearly $39 million, and to forfeit $52 million—for a total of $122.9 paid back to the federal government.
If Banque Pictet complies with the terms of the agreement and continues cooperating with investigators for three years, prosecutors will dismiss the criminal charges against the bank.
Key Background
According to the Justice Department, Banque Pictet used a variety of methods to hide U.S. taxpayer money. Prosecutors said that Pictet opened offshore entities in the bank’s name, but knowingly operated them on behalf of American clients. They then allowed these clients to withdraw money by checks below $10,000—the amount required to report to the IRS. They also provided some clients with “hold-mail account services,” where mail associated with secret accounts was held at the bank in order to obfuscate an account’s real owner. In a statement released on Monday, Pictet said the charges were related to a “legacy investigation” dating back to 2014. The bank said they were “pleased to have resolved this matter and will continue to take steps to ensure its clients meet their tax obligations.”
Tangent
The Justice Department has spent over a decade cracking down on Swiss banks for helping wealthy Americans hide their money. UBS, Switzerland’s largest bank, was fined $788 million in 2009 after a Justice Department investigation determined they helped American clients hide taxable assets. Credit Suisse, then the second largest bank in the country, pleaded guilty five years later—paying a massive $2.6 billion fine for similar practices. Banque Pictet said Monday’s agreement came about following “extensive cooperation” with U.S. law enforcement. The bank said it began “enhancing its policies and practices” for complying with U.S. tax law before the investigation into UBS was public knowledge.
Further Reading
Source: https://www.forbes.com/sites/zacharyfolk/2023/12/04/swiss-bank-admits-hiding-56-billion-for-american-taxpayers/