Credit Suisse to plead guilty in tax case

NEW YORK (CNNMoney)- The Justice Department filed charges Monday against Credit Suisse ahead of the bank's expected guilty plea for allegedly allowing tax evasion by its U.S. clients.

People familiar with the agreement said the government is poised to announce the guilty plea Monday evening as part of a settlement of a long-running Justice Department probe.

The bank is planning to pay about $2.5 billion to the federal government and New York financial regulators.

Missing in the plea deal is any agreement by the Swiss bank to provide names of the U.S. clients who allegedly used the bank to hide money from the IRS, the sources said.

Under its agreement with the Justice Department, Credit Suisse can say that it can't provide that information because to do so is against Swiss law, even as it can continue to do business in the U.S, according to the sources.

In 2009, Swiss bank UBS settled similar charges and paid $780 million, while also agreeing to provide names of thousands of customers.

Justice Department officials call the guilty plea a major milestone -- the first such plea by a bank in decades.

For years, prosecutors shied away from charging banks with crimes because of fear that they could lose their charters and go out of business.

As part of the Credit Suisse guilty plea agreement, U.S. banking regulators have agreed not to try to pull the bank's license to do business in the U.S., the sources said.

Credit Suisse declined to comment. The bank has said that the illegal activity was the work of a few rogue bankers.

The Justice Department has been criticized for its inability to bring major prosecutions related to the global financial crisis, and the shoddy banking practices that nearly sank several major banks. The Credit Suisse deal will likely do little to quiet that criticism, as the conduct involved is not related to the financial crisis.

The case involves bankers who allegedly used novel ways to help clients hide money in offshore accounts. The bank allegedly opened a branch at the Zurich airport, equipped with a special elevator to whisk clients to private banking suites. The arrangement allowed customers to do their banking quickly before hitting the Alpine ski slopes.


To find out more about Facebook commenting please read the
Conversation Guidelines and FAQs

Leave a Comment