Two Swiss Banks Reach Deal to Avoid Possible U.S. Tax-Evasion Charges

DEC 31 2015, 1:36 PM ET

Two Swiss Banks Reach Deal to Avoid Possible U.S. Tax-Evasion Charges

by REUTERS

Two Swiss banks will pay a total of more than $107 million to the U.S. Department of Justice to avoid possible prosecution for helping Americans evade taxes, the department said on Thursday.

Bank Lombard Odier & Co. Ltd, a Geneva-based unit of Lombard Odier Group, will pay $99.8 million in the deal, while Zurich-based DZ Privatbank (Schweiz) AG has agreed to pay $7.45 million, the Justice Department said.

Representatives of the two banks could not be immediately reached for comment outside European business hours on Thursday.

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The exterior of the Internal Revenue Service building in Washington, D.C., on March 22, 2013. Susan Walsh / AP, file

The Justice Department has now reached agreements with more than 75 Swiss banks under a voluntary program it launched in 2013 to allow Swiss banks to resolve potential criminal charges by disclosing cross-border activities that helped U.S. account holders conceal assets.

Under the program, banks also must provide detailed information on the accounts of U.S. taxpayers under investigation. Banks that were already under criminal investigation were excluded from the program.

Swiss Legislature Considers Ending Tax Deduction for Bribery

Lombard Odier had 1,121 U.S.-related accounts since August 2008, which held a total of about $4.45 billion, the Justice Department said.

The bank engaged in various strategies to help U.S. taxpayer clients shield their money from the Internal Revenue Service, it said.

For example, about $24 million of those accounts were titled in the name of insurance companies through which the bank's U.S. taxpayer clients owned certain types of insurance products. Nonetheless, the accounts were funded with assets from the U.S. taxpayer clients, the Justice Department said.

DZ Privatbank had a total of 691 U.S.-related accounts since August 2008, with assets of about $498 million, the Justice Department said.

Swiss Bank Julius Baer Reaches Tentative Deal in U.S. Tax Evasion Case

On Wednesday, Swiss bank Julius Baer announced it had reached a tentative agreement with U.S. authorities to settle tax evasion allegations. That deal, which calls for the bank to pay up to $547.25 million, was negotiated with the U.S. Attorney's Office for the Southern District of New York and remains subject to approval by the U.S. Department of Justice, Baer said in a statement.

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Julius Baer to pay $547 million to resolve U.S. tax probe

By Giles Broom and David Voreacos, Bloomberg News
December 30, 2015 Updated: December 30, 2015 9:28pm

Julius Baer Group said it expects to pay about $547 million to settle a U.S. criminal investigation into how it helped Americans evade taxes, clearing the way for other Swiss banks to resolve similar probes.

The agreement in principle between Switzerland's third-largest wealth manager and the U.S. Justice Department sets the penalty bar for about a dozen Swiss banks looking to resolve criminal probes of their conduct. Seventy-five other Swiss banks avoided prosecution this year by voluntarily disclosing how they helped Americans avoid taxes and paying $1 billion in penalties.

Julius Baer disclosed the settlement in a statement Wednesday, as it earmarked another $197 million beyond the $350 million it set aside in June to resolve the probe.

The Zurich-based company said it expects to conclude the agreement of the four-year inquiry in the first quarter.
CEO Boris Collardi had said he wanted to resolve the U.S. probe by year-end. Uncertainty around the Justice Department inquiry has hampered the company's ability to make deals.

Julius Baer has been negotiating a deferred-prosecution deal to resolve the investigation, a source said.

Under such an agreement, a company is typically charged with a crime that is later dismissed if the firm makes a payment, complies with specified conditions, and makes a detailed statement of facts about its wrongdoing.

Mark Abueg, a Justice Department spokesman declined to comment on the Julius Baer statement.

The announcement came as the Justice Department concludes a disclosure program in which 75 Swiss banks have avoided prosecutions. Lawyers defending banks have said the Justice Department wouldn't resume the criminal cases until it completed the program.

About a dozen Swiss banks have been under U.S. criminal investigation since Switzerland's largest lender, UBS Group, settled with the U.S. UBS agreed in 2009 to pay $780 million, while Credit Suisse Group, the No. 2 Swiss bank, paid $2.6 billion in 2014. Both admitted they helped Americans cheat the IRS.

Those still under investigation include the Swiss unit of HSBC Holdings, Europe's biggest bank.

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