Credit Suisse testifies before Senate about secret Swiss bank accounts and plans to provide more names to IRS.
As the United States Department of Justice closes in on its search through FATCA for US taxpayers who hid their funds to avoid tax liability, several international banks and their employees have been charged with aiding these taxpayers.
Brady Dougan, CEO of Credit Suisse, admitted today that his bank’s employees had helped US taxpayers in evading taxes. He defended his organization, stating that a small group of Swiss-based employees were responsible for this unlawful operation, adding that the group of employees took great effort to hide their actions from Credit Suisse’s executives.
Dougan’s apology and testimony followed close on the heels of a U.S. Senate Subcommittee report which revealed that as many as 22,000 Americans concealed an estimated $12 Billion in assets in their Credit Suisse bank accounts with the help of the Swiss banking giant’s employees. Senator Carl Levin, D-Mich, the chair of the Senate Subcommittee, listed several findings of the report. The report showed that bankers of Credit Suisse traveled to the United States on Tourist Visas in order to covertly aid wealthy U.S. clients. They met existing clients in five-star hotels and recruited new clients in social gatherings in New York and Florida.
Dougan stated that he views the findings “just as egregiously” as the U.S. Senate Subcommittee. He said that the bank is cooperating with Department of Justice’s offshore tax evasion investigation and the operating procedures of the bank have been changed. However, he responded to the subcommittee questioning by stating that by the time the executives of Credit Suisse found out about these grave offenses, most of the employees were gone. Most of them were not fired for helping American clients in tax evasion.
Many of the Senate Subcommittee members showed their displeasure with Swiss banks and the slow pace of the disclosure process. John McCain, R-Ariz., criticized the Swiss Government for attempting to prevent Credit Suisse and other Swiss banks from complying with U.S. Department of Justice’s subpoenas issued in 2011. Levin stated that if Swiss banks want to conduct business through their U.S. based divisions, they have to comply with U.S. laws. The subcommittee pressed the Department of Justice to pursue international banks for disclosures more aggressively.
Los Angeles Tax Attorney, Vic Abajian, who currently represents several Credit Suisse account holders, says it is not too late to make a disclosure to the IRS under the 2012 OVDP. He received pre-clearance letters from the IRS as recently as February 2014 for those holding Credit Suisse accounts. He warns, however, that accounts holders will be disqualified from the amnesty program once Credit Suisse provides names to the IRS.