An elevator controlled remotely. A bank office referred to by its code name. A sheaf of bank statements hidden in the pages of Sports Illustrated.
At times, a US Senate report into how Credit Suisse, a bank based in Zurich, helped its American customers hide billions of dollars of assets from Treasury reads more like a John Grisham novel than a white paper.
The report, the product of a two-year investigation, was released on Tuesday by the Senate permanent subcommittee on investigations. It contends that the bank actively helped thousands of Americans conceal their wealth offshore. Brady Dougan, the chief executive of Credit Suisse, and other top bank officials are scheduled to appear along with two Justice Department officials at a hearing on the report on Wednesday.
”It’s time to ramp up the collection of taxes due from tax evaders on the billions of dollars hidden offshore,” Senator Carl Levin, a Michigan Democrat and the subcommittee’s chairman, said in a statement.
The report is scathing both to the financial institution and to American law enforcement, which the subcommittee accuses of dragging its feet in holding the bank and the relevant taxpayers accountable.
The 176-page report charges that from at least 2001 to 2008, the Swiss bank helped its American customers evade taxes through a variety of means, including opening accounts in the name of shell companies and sending Swiss bankers to the US to secretly recruit new clients and avoid creating a paper trail.
In one instance, it says, a Credit Suisse banker travelled to the US to meet the customer at the Mandarin Oriental Hotel and ”over breakfast handed the customer bank statements hidden in a Sports Illustrated magazine”.
The bank’s New York office also ”kept a document listing ‘important phone numbers’ of intermediaries that formed offshore shell entities for some of the bank’s US customers” and urged American customers to come to Switzerland to do their banking, opening a full-service office in the Zurich airport, the report said.
That office even had a code name, ”SIOA5”. Mr Dougan told the Senate investigators that the airport office was for the convenience of clients heading to and from Swiss ski resorts, so that they would not have to go out of their way to Zurich.
Credit Suisse did not respond to a request for comment on the report.
One American client recalled visiting a Credit Suisse office and taking an elevator with ”no buttons” that was ”controlled remotely”.
”The prospect of US prosecution has been forceful enough to cause 43,000 taxpayers to self-report and pay nearly $6 billion in taxes and penalties,” a Justice Department spokeswoman said.
Five years ago, the US charged the largest Swiss bank, UBS, with aiding tax evasion. UBS admitted guilt and paid $780 million in fines and other costs.
This month, Credit Suisse reported net income of about $300 million, in the fourth quarter of 2013. Last week it paid a fine of $196 million for failing to register with the agency before advising American clients.
New York Times