- Justice has reached 73 non-prosecution agreements this year
- Banks admit helping U.S. clients conceal assets from IRS
Five more Swiss banks, including one owned by Brazilian billionaire Joseph Safra, agreed to pay penalties to avoid prosecution for helping U.S. clients evade taxes, pushing the number of accords to 73 and total payments to more than $1 billion.
Bank J. Safra Sarasin AG agreed to pay $85.8 million, Coutts & Co. $78.5 million and Banque Cantonale Vaudoise $41.7 million under non-prosecution agreements released Wednesday by the U.S. Justice Department. The government is nearing the end of a disclosure program that requires firms to say how they helped Americans cheat the Internal Revenue Service and where their money went.
The program has generated leads that prosecutors and the IRS will pursue around the world in 2016, Caroline Ciraolo, acting assistant attorney general of the Justice Department’s Tax Division, said in a statement.
The largest settlement this year was BSI SA’s payment of $211 million announced on March 30. Dozens of smaller accords preceded a flurry of larger penalties in recent weeks. Credit Agricole SA’s Swiss unit agreed to pay $99.2 million and BNP Paribas SA’s Swiss unit reached a $59.8 million settlement. While the U.S. has signed 73 accords, they cover 75 banks.
Gonet & Cie also agreed to pay $11.5 million, while Banque Cantonale du Valais will pay $2.3 million, the Justice Department said Wednesday.
Statement of Facts
Like other Swiss firms, Safra Sarasin signed a statement of facts admitting steps that it took to help U.S. clients hide assets from the IRS, like holding them in entities created in Panama, Liechtenstein, the British Virgin Islands and the Cayman Islands. The bank had 1,275 U.S. accounts with a maximum value of $2.2 billion after 2008.
One lawyer in Geneva helped clients open undeclared accounts in the names of Panama corporations with assets of about $250 million, according to the accord.
Safra Sarasin admitted it processed at least 20 withdrawals of cash or precious metals valued at $100,000 or more. The bank helped one client, whose account was held in the name of a Panama company, to withdraw $2.9 million in gold at account closing.
The accord “removes all uncertainty linked to Banque Cantonale du Valais’s relations with its American customers,” the company said in an e-mailed statement. A spokeswoman for Safra Sarasin declined to comment.
Switzerland’s Union Bancaire Privee agreed to buy Coutts International’s client assets from Royal Bank of Scotland Group Plc in March, but is exempt from liability for the fine.
RBS noted the settlement in an e-mailed statement, calling it a “legacy matter.”
“The signature of this agreement removes a source of uncertainty and allows Gonet & Cie. to dedicate itself fully and confidently to its future development,” the bank said in an e-mailed statement.
Banque Cantonale Vaudoise said in an e-mailed statement that the U.S. fine is totally covered by existing provisions and the settlement won’t have any impact on the bank’s dividend policy.
The pacts are part of a Justice Department program that spares participants criminal liability in the U.S. if they disclose their wrongdoing. To reduce their penalties, Swiss banks have prodded thousands of their U.S. clients to reveal hidden accounts to the IRS.