Credit Suisse Group AG’s former head of North America offshore banking, Markus Walder, was among seven bankers charged with conspiring to help clients in the U.S. evade taxes through secret bank accounts.
The seven bankers and an eighth executive were charged yesterday in an amended indictment in federal court in Alexandria, Virginia. Four of the Credit Suisse bankers were previously charged. The new defendants include Walder, Susanne D. Ruegg Meier, a former Credit Suisse manager, and Andreas Bachmann, another former banker at the Zurich-based lender, Switzerland’s second largest.
The indictment increases pressure on Credit Suisse, which said July 15 that the Justice Department notified it that was a target of a criminal probe over former cross-border private banking services to U.S. customers. The U.S. is pursuing banks, bankers and advisers that encouraged American taxpayers to hide accounts from the Internal Revenue Services.
“Managers and bankers working in the cross-border business knew and should have known that they were aiding and abetting U.S. customers in evading their U.S. income taxes,” according to the indictment.
Walder, a Swiss resident, supervised teams of private bankers in Geneva and Zurich who worked in an unregistered private banking business in the U.S., and was a senior manager in a business registered with the U.S. Securities and Exchange Commission, according to the indictment.
$3 Billion in Assets
Walder and others helped U.S. customers evade income tax through accounts not declared to the IRS, according to the indictment. In the fall of 2008, the bank maintained thousands of secret accounts for U.S. customers with as much as $3 billion in assets, according to a Justice Department statement.
The indictment traces how the bankers helped 35 American customers hide their funds in undeclared bank accounts. One of the accounts was opened in 1953 by a resident of Elizabeth, New Jersey, by an individual identified only as “customer 26.” That person died in 1998 and the account was taken over by another Credit Suisse customer, the indictment said.
“Credit Suisse is committed to a fully compliant cross-border business,” the bank said in a statement yesterday. “Subject to our Swiss legal obligations and throughout this process we will continue to cooperate with the U.S. authorities in an effort to resolve these matters.”
Those bankers already charged on Feb. 24 were Marco Parenti Adami, Emanuel Agustoni, Michele Bergantino and Roger Schaerer. They live in Europe and have not appeared yet in U.S. court.
The indictment yesterday also named Josef Dorig, the chief executive officer of a trust and asset management company owned by the bank.
Separately yesterday, federal prosecutors in New York accused Beda Singenberger, 57, a Swiss financial adviser, of conspiring with more than 60 U.S. taxpayers to hide more than $184 million in offshore accounts.
According to the indictment against the Credit Suisse bankers, while operating an illegal U.S. cross-border business, the bank made false filings to the Federal Reserve in 2005 and 2007 that sought to conceal its participation in the tax-evasion scheme.
The bankers also used three Swiss private banks, a Swiss cantonal bank and two asset management firms to help U.S. taxpayers hide accounts from the IRS, according to the indictment.
In 2008, U.S. prosecutors conducted a probe into whether UBS AG, Switzerland’s biggest bank, helped Americans evade taxes. In February 2009, the U.S. criminally charged UBS with aiding tax evasion by U.S. clients.
Data to IRS
UBS avoided prosecution by paying $780 million, admitting it fostered tax evasion, and giving the IRS data on more than 250 accounts to avoid criminal prosecution. It later turned over data on another 4,450 accounts. In October, the U.S. dropped its criminal case against UBS.
The U.S. filed a civil action in April against London-based HSBC Holdings Plc, the largest European bank by assets, seeking information about U.S. citizens who may have banked in India to hide accounts from the IRS.
In the past two years, prosecutors have filed criminal tax charges against more than two dozen UBS clients, four UBS bankers, four other alleged offshore enablers and several other clients of Credit Suisse and HSBC.
The case is U.S. v. Adami, 1:11-cr-00095, U.S. District Court, Eastern District of Virginia (Alexandria).