Finter Bank Zurich agreed to pay a $5.4 million penalty and become the third Swiss bank to settle under a U.S. program that lets firms avoid prosecution if they say how they helped American clients avoid taxes.
Under the program, Swiss banks escape charges by laying out details of their cross-border business, as well as sharing information on American accounts. Other banks are negotiating similar accords.
The non-prosecution agreements aren’t available to a dozen Swiss banks under criminal investigation. Credit Suisse Group AG’s main bank subsidiary pleaded guilty last year and paid a $2.6 billion fine.
Finter admitted that from 1958 to 2011, it “knew or should have known that it was highly probable” U.S. clients who opened accounts “were not complying with their U.S. income tax and reporting obligations,” according to the agreement released Friday by the Justice Department.
The Zurich-based bank admitted that it helped U.S. clients hide accounts from the Internal Revenue Service by using sham entities as owners in name, offering code names or numbered accounts to avoid leaving paper trails, and providing cash cards and credit cards linked to undeclared accounts.
After 2008, Finter had 283 U.S.-related accounts valued at as much as $235 million, or 5 percent of its assets under management, according to the agreement. The bank also said it took in undeclared accounts from other banks after 2009, including some referred by an asset manager now under indictment in the U.S.
Finter didn’t immediately respond to a call or an e-mail seeking comment. The bank was founded in 1958 in Chiasso, Switzerland, and has a branch office in Lugano, according to the Justice Department.
BSI SA, one of the largest private banks in Switzerland, reached the first non-prosecution deal on March 30 through the program. It paid $211 million and admitted that it managed about 3,500 U.S. accounts with a peak value of $2.78 billion in 2008.
On May 8, the U.S. reached a non-prosecution agreement with Vadian Bank AG, which paid a $4.2 million penalty.