Archive for June, 2014

GuiltyThe U.S. Department of Justice and the IRS have announced that Credit Suisse AG pleaded guilty on May 19, 2014, to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns with the IRS. With this guilty plea, Credit Suisse has admitted to knowingly and willfully aiding thousands of U.S. taxpayers in opening and maintaining undeclared foreign accounts as a means to conceal assets and income from the IRS for decades prior to and through 2009.

The guilty plea is a result of an investigation spanning several years by U.S. authorities. Another result of this investigation is the indictment of eight former executives of the Swiss corporation since 2011, of which two individuals have already pleaded guilty to U.S. tax evasion. The $2.6 billion payment to be made by Credit Suisse is the highest ever payment in a U.S. criminal tax case.

The terms of the plea agreement provide that Credit Suisse is to pay $1.8 billion to the DOJ for the U.S. Treasury, $100 million to the Federal Reserve, and $715 million to the New York State Department of Financial Services for a total of $2.6 billion. Credit Suisse also paid approximately $196 million of interest and penalties earlier this year to the Securities and Exchange Commission as a result of violating federal securities laws by not registering with the SEC before providing cross-border brokerage and investment advisory services to U.S. clients.

The violation of federal securities laws is just one of many on the long list of violations committed by Credit Suisse during the past few decades. The company also acknowledged assisting clients in using sham entities to hide undeclared accounts, failing to maintain records related to undeclared accounts in the U.S. and structuring transfers of funds to evade currency transaction reporting requirements, among other violations, to evade the payment of U.S. income tax as well as related reporting requirements.

The DOJ News Release of Credit Suisse’s guilty plea comes just in time as new reporting requirements through FATCA become imminent. Credit Suisse has agreed to make full disclosure of its cross-border activities as well as implement programs in order to be in compliance with reporting obligations as necessary under FATCA.


By Kathy Sikora, CPA | ksikora@withum.com | 609.520.1188

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