The largest Swiss bank has admitted to collusion along with U.S. taxpayers and others to conceal over $5.6 billion in tax revenue from the Internal Revenue Service, the Department of Justice announced Monday.
Banque Pictet, the private branch of the 218-year old Pictet Group, will pay around $122.9 million in penalties and restitution as part of a deal with the prosecutors.
From 2008 to 2014 the bank owned 1,637 accounts for American customers, who collectively avoided paying around $50.6 Million from U.S. taxes, the DOJ stated.
The accounts contained greater than $5.6 billion out of the $20 billion of funds of U.S. taxpayers that the bank was able to manage during the time.
If the bank is in compliance with the terms of the agreement in the agreement, it will be able to claim that the Justice Department has agreed to suspend prosecution for a period of three years before deciding to drop the charge of criminal conspiracy to fraud the IRS.
In the course of the agreement it was also agreed that the institution would work in ongoing investigations into the existence of account cloaked by banks.
“Rooting out financial malfeasance remains a priority for this Office,” Damian Williams, U.S. Attorney for the Southern District of New York stated in an official statement.
“We encourage companies and financial institutions to come to us to report wrongdoing before we come to you,” said the man.
The Pictet Group said in a statement that the acquisition will be a result of the company’s “extensive cooperation with the US authorities, in full compliance with Swiss law.”
“Pictet is pleased to have resolved this matter and will continue to take steps to ensure its clients meet their tax obligations,” the statement read.
The Pictet Group helped clients evade U.S. taxes by opening accounts, storing and hiding accounts that were not declared the prosecutors charged.
The bank employed “a variety of means” to conceal the accounts, as per the agreement on deferred prosecution.
The bank kept clients’ mail related to their accounts in the bank, instead of forwarding it to clients who reside in the U.S., in order to “help ensure that documents reflecting the existence of the accounts remained outside the United States and beyond the reach of U.S. tax authorities.”
It also established and operated offshore entities which were created for “no business purpose but existed solely to help the Pictet Group’s U.S. taxpayer-clients hide their offshore accounts and assets from U.S. tax authorities.”
The Pictet Group maintained about 529 offshore entities in those U.S. accounts in question in the pertinent time period.
The group also helped U.S. tax-evading clients keep hidden funds offshore, by transferring funds from accounts that were not declared to accounts that appear to be owned by non-U.S. customers.
The accounts were under the control of U.S. taxpayer-clients through “fictitious donations,” according to the DOJ.
