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Credit Suisse concludes criminal tax case with penalty payment

A 25-minute hearing brought to a close the U.S. criminal tax case against Credit Suisse. Federal court Chief Judge Rebecca Beach Smith accepted the bank's guilty plea to charges that it helped some of the wealthiest Americans avoid paying taxes. She ordered the bank to pay fines and restitution that totaled nearly $1.8 billion.

The penalty included a payment to the Internal Revenue Service of almost $667 million and a $1.14 billion criminal fine. The federal sentence followed the $2.5 billion settlement agreement that the bank reached with multiple agencies that also included the New York state financial services department and the Securities and Exchange Commission.

The Swiss bank admitted that it helped American clients conceal assets in undisclosed bank accounts. The strategy allowed wealthy clients to avoid U.S. taxes.

The judge noted that the fine amount fell within the federal guidelines and required payment within one week. She cited deterrence as one of the important factors in accepting the plea.

A continuing investigation has resulted in indictments against a number of employees who worked at the bank, as well as a trust company owner and several of the bank’s U.S. clients. Two of the former employees pleaded guilty for their roles in managing companies used to avoid taxes. They each face up to five years in prison at a December sentencing.

The United States Department of Justice continues its crackdown on offshore accounts. In recent weeks, it has brought charges against a former client advisor at a Swiss bank and a U.S. citizen who used undeclared accounts in Switzerland to avoid reporting earned income.

Source: Reuters, "Credit Suisse ordered to pay $1.8 billion to finalize U.S. guilty plea," Gary Robertson, Nov. 21, 2014

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