US Senate Panel Says Credit Suisse Violated Plea Deal in Tax Case

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Facts

  • The US Senate Finance Committee on Wednesday claimed that Credit Suisse has violated the terms of a 2014 criminal plea deal, citing failures to disclose transfers related to an ongoing tax conspiracy involving more than $100M held by a single family of US taxpayers.1
  • The publication of these findings wraps up a two-year investigation led by Sen. Ron Wyden (D-Ore.), which estimates that over $700M is held in secret accounts at the Swiss bank in breach of its deal with the US Justice Department.2
  • This comes after several former Credit Suisse bankers urged US authorities to reopen the case in early 2021, over allegations that the planned tax evasion scheme continued "well after" the plea deal and sentencing.3
  • Following information requests from the committee, Credit Suisse identified 23 undeclared accounts belonging to wealthy US citizens with more than $20M at the bank, despite its executives' promises to stop helping Americans evade US taxes.4
  • Though US citizens are allowed to hold funds in foreign bank accounts, they must file forms with the IRS disclosing the assets and pay taxes on any relevant gains.5
  • The troubled Credit Suisse was acquired by its rival UBS this month under pressure from Swiss regulators, with Switzerland agreeing to backstop losses related to any legal or regulatory liabilities up to $9.8B.6

Sources: 1Wall Street Journal, 2CNN, 3FT, 4POLITICO, 5CNBC, and 6Daily Mail.

Narratives

  • Narrative A, as provided by Bloomberg. Credit Suisse's new leadership does not tolerate tax evasion and has been actively collaborating with US authorities to tackle any past wrongdoing or current concerns. Undeclared accounts are being shut down and any employee who fails to comply with the bank's standards of conduct will be disciplined.
  • Narrative B, as provided by Washington Post. Though Credit Suisse states that this report focuses on decade-old "legacy issues," the truth of the matter is that the now-troubled bank has disclosed nearly two dozen "potentially undeclared" accounts a full nine years after the plea agreement was put into place. As the Swiss bank's tax evasion scheme defrauding the US remains active, US authorities must take strong punitive action against Credit Suisse to discourage similar behavior elsewhere in the banking sector.

Predictions