New York’s top banking regulator sent a subpoena to Credit Suisse Group AG (CSGN) last week as he examines whether its private bank helped clients evade state taxes, a person with knowledge of the matter said.
Benjamin Lawsky, the superintendent of New York’s Department of Financial Services, sought records from the firm’s New York operations, including e-mails, travel records, calendars, payroll information and material on hard drives, according to the person. He also is seeking information on Roger Schaerer, a former top manager at the New York office, and on executives who worked with Schaerer, the person said, asking not to be identified because the probe is confidential.
Lawsky opened the inquiry last month, asking the bank for documents, as well as materials gathered by the U.S. Senate’s Permanent Subcommittee on Investigations, which also has examined the bank. Credit Suisse has been looking to resolve an earlier federal investigation of its alleged role in helping Americans evade taxes, a probe that already prompted the Zurich-based bank to book more than $1 billion in legal provisions and fines.
Lawsky has the power to revoke Credit Suisse’s license to operate in New York, a threat he employed two years ago against Standard Chartered Plc as part of his investigation into whether the London-based bank violated U.S. laws regarding money transfers linked to Iran. While he doesn’t have the authority to criminally charge the bank, he can refer findings to the state’s attorney general.
“Credit Suisse is cooperating fully” with Lawsky’s office, said Jack Grone, a company spokesman. Jodi Avergun, a lawyer for Schaerer, didn’t respond to a message seeking comment. The subpoena was reported yesterday by the Financial Times.
Credit Suisse’s New York office served as a U.S. channel for efforts to help clients open undisclosed accounts in Switzerland, the Senate subcommittee wrote in a February report.
Schaerer, a dual U.S.-Swiss citizen, supervised the New York representative office from 1999 to 2008, according to a 2011 indictment of him and seven others in federal court in Alexandria, Virginia. In 2004, he was promoted to director at the business, and as the senior representative in the U.S. he serviced undeclared accounts of clients, according to the indictment.
Schaerer and Markus Walder, then the head of North American offshore banking, made false statements to the Federal Reserve Bank of New York about the firm’s undeclared U.S. cross-border banking business and the representative office’s role in it, according to the indictment. Schaerer and Walder haven’t responded in court to the accusations.
The indictment cited the accounts of 35 customers who relied on Credit Suisse bankers to help them hide funds from the Internal Revenue Service. Schaerer told one customer that “account statements were not kept in the United States, but sent via either computer or fax from Switzerland to the representative office before the meeting and shredded at the meeting’s conclusion,” according to the indictment.