Credit Suisse Said to Face U.S. Probe on Israel Client Taxes

  • Bank said on June 19 that it had put five employees on leave
  • Probe looking at whether bank helped clients evade U.S. taxes

Credit Suisse Group AG is being investigated by the Justice Department, which is looking into whether bank employees may have helped clients in Israel evade U.S. taxes, a person familiar with the matter said.

The bank has placed five employees on leave while it conducts an internal investigation into the matter, Credit Suisse said in an e-mailed statement today, reiterating a comment from June 19.

"The investigation is not linked to potentially fraudulent behavior to the detriment of clients," the bank specified in the statement. "Credit Suisse is committed to running its business in a tax-compliant manner. It conducts its banking business in strict compliance with all applicable laws, rules and regulations in the markets in which it operates."

The investigation of the Israel accounts could lead to new charges in the U.S. against Credit Suisse and its bankers. A new Justice Department case could also result in harsh regulatory scrutiny. The bank remains under a consent order with New York’s Department of Financial Services stemming from its 2014 guilty plea to helping Americans evade taxes.

The Wall Street Journal reported the Justice Department investigation earlier Wednesday, noting that the probe aims to determine whether employees in Israel helped dual Israeli and U.S. citizens conceal their U.S. status to evade American taxes.

The five suspended employees worked on Credit Suisse’s Israel desk, focusing on initial public offerings for Israeli technology companies,  Swiss newspaper Schweiz am Sonntag reported.

A spokeswoman for the Justice Department declined to comment.

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