Swiss Cheese: A Swiss Bank Has Been Ordered To Pay $60.4 Million In Tax Evasion Case

Swiss Cheese: A Swiss Bank Has Been Ordered To Pay $60.4 Million In Tax Evasion Case

Basler Kantonalbank (BKB) entered into a deferred prosecution agreement which will see them pay $60.4 million in penalties for conspiring to evade U.S. taxes. The Department of Justice announced the ruling.

According to court documents, the Swiss Bank admits that between the years of 2002-2012 that it conspired (along with its employees, asset managers, and even clients) to 1. Defraud the United States with respect to taxes, 2. Commit tax evasion, 3. File false federal tax returns.

“The era of hiding money overseas to evade U.S. tax obligations is over,” said Principal Deputy Assistant Attorney General Richard Zuckerman of the Justice Department’s Tax Division. “Financial institutions, professionals, and account-holders are on notice that the Department continues to aggressively pursue these offenses and will hold both individuals and entities accountable.”

At its peak (which was in 2010), Basler Kantonalbank held around 1,100 accounts of behalf of American customers, with a combined value of roughly $813.2 million. A great number of these were undeclared accounts that were found to be a part of the conspiracy.

The $60.4 million penalty issued against Basler Kantonalbank is comprised of the following parts:

-$17.2 million in restitution will go to the IRS, which represents the unpaid taxes resulting from BKB’s participation in the conspiracy;

-$29.7 million will be forfeited to the United States, which represents gross fees (not profits) that the bank earned on its undeclared accounts between 2002 and 2012

-$13.5 million is what BKB will pay as a fine.

“This penalty amount reflects BKB’s thorough internal investigation and cooperation with the United States, as well as the bank’s extensive efforts at remediation, and its waiver of any claim of foreign sovereign immunity,” the Department stated. “Among other remedial efforts, BKB implemented measures to require all U.S.-related accounts be tax compliant, closed a branch office responsible for much of the tax fraud and fired the employees involved in the offense, and conducted extensive outreach to former clients to encourage them to participate in IRS-sponsored voluntary disclosure programs.”

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