From CBC

Crédit Agricole, Dreyfus Sons, Baumann avoid criminal charges after hiding assets from IRS

Three Swiss banks, including a unit of France’s Crédit Agricole SA, will pay a total of more than $130 million US to the U.S. Justice Department to avoid possible prosecution for helping Americans evade taxes, the department said on Tuesday.

The Zurich-based unit of Crédit Agricole will pay $99.2 million, the largest share of the total penalty. The $130 million sum also includes a $24.2 million from Dreyfus Sons & Co Ltd, and $7.7 million from Baumann & Cie, Banquiers, both in Basel, Switzerland.

Spokespeople for the three banks could not be immediately reached for comment outside of Swiss business hours on Tuesday.

The banks settled under a voluntary program the Justice Department 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.
Accounts for U.S. citizens

Banks that were already under criminal investigation were excluded from the program.

Crédit Agricole managed about 954 U.S.-related accounts worth more than $1.8 billion since August 2008, the Justice Department said. Its conduct included transferring the assets of some U.S.-related accounts “in ways that concealed the U.S. connection to those accounts,” the Justice Department said.

For example, some U.S. taxpayers were able to fully deplete assets from accounts that they concealed from the IRS by making multiple cash withdrawals or reloading pre-paid cash cards.

Dreyfus held 855 U.S.-related accounts since August 2008, worth about $1.76 billion, while Baumann & Cie held 167 such accounts, worth about $514.1 million, the Justice Department said. Practices at both banks included setting up overseas entities, including in Panama, to hold client funds and conceal the owners’ true identities from U.S. tax authorities.

IMAGE: Crédit Agricole managed about 954 U.S.-related accounts worth more than $1.8 billion since August 2008, according to the U.S. Justice Department. (Reuters)

For more on this story go to: http://www.cbc.ca/news/business/swiss-banks-us-prosecution-1.3366454

Related story:

Swiss bank hid clients’ assets for tax evasion

By David Voreacos, from Business Day Live

NEW JERSEY — Dreyfus Sons & Co has operated for two centuries as a private Swiss bank, catering to Jewish clients who wanted to hide assets from the Nazis during the 1930s and the Second World War.

More recently, it helped US clients hide assets from the Internal Revenue Service (IRS) by concealing their true ownership with offshore entities and by storing gold and cash in a segregated area of its vaults, according to a nonprosecution agreement released on Tuesday that the bank reached with the US justice department.

Dreyfus avoided US prosecution by agreeing to pay $24.2m and admitting it “did not implement strict enough controls” to ensure that its American clients paid their taxes, the agreement says.

George Clarke, a lawyer for Dreyfus, declined to comment on the accord.

The US announced two other pacts on Tuesday, with Credit Agricole’s Swiss unit, which agreed to pay $99.2m, and Baumann & Cie, which is to pay $7.7m.

Anne-Sophie Gentil, a spokeswoman for Credit Agricole, did not immediately respond to an e-mail seeking comment on its pact. Keith Krakaur, a lawyer for Baumann, did not immediately return a call.

In all, 64 Swiss banks have agreed to pay almost $742m in penalties this year. But while many of those accords spell out classic Swiss tactics, such as numbered accounts and off-the-shelf corporations to help clients cheat the IRS, none detail the use of gold storage like the Dreyfus pact.

Two decades ago, Dreyfus agreed to serve as a custodian for gold and cash held by a Swiss-based British Virgin Islands entity — 315 accounts valued at $440m, in all.

Some of those accounts should have been disclosed to the IRS and were not, until clients came forward to tell the tax agency about them to avoid prosecution, according to the bank’s statement of facts in the agreement.

“Although some of the gold and cash client base maintained their accounts because of fears related to the collapse of the banking system,” others “show strong indicia of the concealment of assets”, the agreement says.

The British Virgin Islands entity had an account at the bank, with US customers holding sub-accounts, according to the pact.

The subaccounts were often held in the names of offshore trusts, foundations or corporations.

Dreyfus was founded in 1813 in Basel by a Jewish immigrant from France. It grew to 7,000 accounts valued at Sf18bn ($18.2bn) in 2013, the accord says. Of those, 855 were US accounts valued at $1.76bn.

Some of those accounts were held in the name of Panamanian corporations, a practice that began after the Second World War because Jewish clients wanted to “protect their assets for reasons of personal safety”, while also hiding them from governments, according to the pact. Of the US accounts, 33 were held in the name of Panamanian entities, with bank employees serving as directors for most.

One such account disguised weekly cheques ranging from $3,900 to $4,100 to a US woman, or her relatives, from 1998 to 2013.

Bloomberg

IMAGE: Picture: THINKSTOCK

For more on this story go to: http://www.bdlive.co.za/world/europe/2015/12/17/swiss-bank-hid-clients-assets-for-tax-evasion