US authorities are considering indicting Swiss bank Credit Suisse over its role in providing offshore private banking services that enabled scores of wealthy Americans to evade taxes, according to current and former senior government sources briefed on the matter.
The possibility, according to these persons, emerged after the bank disclosed on Friday that it is the target of a criminal investigation by US federal authorities over its offshore banking activities.
Credit Suisse said in a statement from its Zurich headquarters that it had "received a letter notifying it that it is a target" of a US Justice Department investigation concerning "historical private banking services provided on a cross-border basis to US persons".
While it has been known for months that Credit Suisse, Switzerland's second-largest bank, was part of a broad investigation by the Justice Department into an array of European banks and other financial institutions that sold offshore banking services to Americans, the disclosure marks the first time that Credit Suisse has publicly pinpointed its place and stakes in the criminal investigation.
When four current and former Credit Suisse bankers were charged in February with helping Americans dodge taxes, the bank said it was not a target of the broad investigation and was cooperating with the general probe.
Offshore tax havens have come under attack in recent years as cash-strapped governments seek to boost revenues in the wake of the financial crisis, forcing countries like Switzerland to pledge to cooperate more to help hunt tax cheats.
Banks involved in the broader US probe include HSBC, Europe's largest bank; Julius Baer, a private bank based in Zurich; and Basler Kantonalbank, a Swiss cantonal bank (government-owned commercial banks).
Credit Suisse, which shut its US offshore business in 2008/09, has always said it had tighter controls in place than UBS did. Credit Suisse said in its statement that it "had been responding to requests for information, including subpoenas," from the Justice Department. But it also said that "subject to our Swiss legal obligations, we will continue to cooperate with the US authorities in an effort to resolve these matters".
It was not immediately clear whether the reference to "Swiss legal obligations" meant adhering to Swiss bank secrecy laws that generally prohibit the disclosure of client names, or to separate talks between Bern and Washington on revising a broad, existing tax treaty between the two countries. The showdown with UBS centred on a clash between Swiss secrecy laws and US insistence that they did not apply to Swiss business conducted on American soil, for American clients.
The target letter to Credit Suisse signals that "the bank stands more than a risk of being indicted," said Jeffrey Neiman, a former federal prosecutor who played a central role in the federal case against UBS over its offshore private banking services.
From / Gulf News