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FCPA Blog Daily News

« To manage compliance risk, first find it | Main | Joseph Spinelli: Risk assessment best practices »
Tuesday
Jun232015

Two more Swiss banks penalized for helping U.S. tax cheats 

The DOJ said Friday that two banks, Bank Linth LLB AG and Bank Sparhafen Zurich AG, reached deals to resolve criminal charges for helping U.S. taxpayers evade taxes.

Bank Linth will pay $4.15 million and Bank Sparhafen will pay $1.81 million, the DOJ said.

Thirteen banks have now resolved charges under the DOJ's voluntary Swiss Bank Program that was started in 2013.

“With each agreement signed under the Swiss Bank Program, we are learning more and more about the schemes individuals are employing to hide their assets overseas,” Caroline D. Ciraolo of the DOJ's tax division said.

The Swiss Bank Program provides a path for Swiss banks to resolve potential criminal liabilities in the United States through non-prosecution agreements.

Banks could enter the program before the end of 2013 by telling the DOJ they might have committed tax-related criminal offenses in connection with undeclared U.S.-taxpayer accounts.

Banks already under criminal investigation for their Swiss-banking activities and all individuals were barred from the program.

Banks meeting the requirements become eligible for a non-prosecution agreement. The NPA's require banks to cooperate in any related criminal or civil proceedings, demonstrate controls to stop the use of undeclared U.S. accounts, and pay penalties.

Bank Linth, one of the biggest regional banks in Eastern Switzerland, was founded in 1848. It's headquartered in Uznach, about 35 miles southeast of Zurich.

"It opened, serviced, and profited from accounts for U.S. clients with the knowledge that many were likely not complying with their tax obligations," the DOJ said.

Since August 2008, Bank Linth held 126 U.S.-related accounts with over $102 million in assets.

Bank Sparhafen was founded in 1850 and has its sole office in Zurich.

It held 91 U.S.-related accounts since 2008, with over $25 million in assets. It "knew or had reason to know [the accounts] were likely not declared to the IRS or the U.S. Treasury, as required by U.S. law," the DOJ said.

Earlier this month, the private-bank unit of SocGen in Switzerland agreed to pay a $17.8 million penalty for a settlement under the Swiss Bank Program.

In March, Lugano-based BSI SA, one of the ten biggest private banks in Switzerland, paid a $211 million penalty under the program. 

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Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.

Reader Comments (1)

Please let us know the opinions of Swiss lawyers involved in Swiss Bank Program protecting Swiss banks. TKS
June 23, 2015 | Unregistered CommenterNickie Saito
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