Credit Suisse Group AG is expected to plead guilty

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Credit Suisse Expected To Plead Guilty To End Tax-Evasion Probe: WSJ

(Reuters) - Credit Suisse Group AG is expected to plead guilty and pay nearly $2.5 billion to U.S. authorities to end a probe of potential tax evasion involving the Swiss bank, the Wall Street Journal reported, citing people familiar with the discussions.

The business daily said under the terms being discussed, the bank will pay about $600 million to New York state's banking regulator and $100 million to the Federal Reserve, in addition to about $1.7 billion to the U.S. Justice Department.

A settlement could come as early as next week, the paper said on Thursday. (http://r.reuters.com/ruc49v)

Reuters reported on Monday that the New York State Department of Financial Services was seeking hundreds of millions of dollars from Credit Suisse and that total fines could top $2 billion.

Credit Suisse plans to plead guilty to a criminal charge as part of the tentative deal, but regulators are not expected to take measures that would risk driving the bank out of business, the WSJ report cited the people as saying.

A Credit Suisse spokesman could not be immediately reached for comment on the report.

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Credit Suisse Clients Remain Secret as Bank to Help U.S.

May 20, 2014 - www.swissinfo.ch

Credit Suisse AG, which pleaded guilty yesterday to aiding Americans’ tax evasion, has so far avoided identifying thousands of customers who cheated the Internal Revenue Service. Instead, it promised to point investigators in the right direction.

While the unit of Credit Suisse Group AG became the largest bank to plead guilty in 20 years, agreeing to $2.6 billion in penalties, its deal with the Justice Department put off the day of reckoning for the firm’s clients. They’re protected by Swiss bank-secrecy laws that make it a crime to disclose account data.

In a deal overseen by Attorney General Eric Holder, Credit Suisse pledged to help the U.S. request those names through a tax treaty with Switzerland. It also will provide other information, outlining the size and number of accounts and indicating where money went. That contrasts with UBS AG, the largest Swiss bank, which avoided prosecution in 2009 by paying $780 million and disclosing the names of 250 American clients. UBS later settled a U.S. lawsuit by revealing 4,450 more account holders.

“It is a mystery to me why the U.S. government didn’t require as part of the agreement that the bank cough up some of the names of the U.S. clients with secret Swiss bank accounts,” said U.S. Senator Carl Levin, a Michigan Democrat.

Credit Suisse shares rose 2 percent to 26.60 Swiss francs by 9:10 a.m. in Zurich trading, trimming the decline this year to 2.3 percent.

Looking Elsewhere

Levin is chairman of the Senate Permanent Subcommittee on Investigations, which issued a report and held a February hearing criticizing practices that Zurich-based Credit Suisse has now admitted, as well as the Justice Department’s failure to get more customer names. The panel found the U.S. used treaty requests to identify 238 Credit Suisse clients out of 22,000 accounts held by Americans. The requests require Switzerland to analyze whether account holders engaged in tax fraud “and the like.”

Deputy Attorney General James Cole defended U.S. efforts to identify account holders during a news conference yesterday, as he did at the Levin hearing in February.

“Credit Suisse is going to provide us a lot of information -- not the specific account names, but they’re going to help us in treaty requests that, under Swiss law, can get us the specific account names,” Cole said.

“They’re providing us with a great deal of additional information that will allow us to determine where those accounts went, how many accounts they had, some of the size of the accounts,” he said. “We can go to other places to try and then locate those accounts.”

‘Endless Negotiation’

Credit Suisse Chief Executive Officer Brady Dougan said in a statement yesterday that the firm regrets its past misconduct.

With Swiss banks bound by their nation’s secrecy laws, Levin has pushed the Justice Department to be more aggressive. In February, he complained about “this endless negotiation with the Swiss about their laws instead of implementing our laws.”

The Swiss government invoked emergency powers in 2009 to allow the one-time handover of account data from Zurich-based UBS. Since then, the government has said it won’t repeat such emergency measures, effectively drawing a line with the U.S.

Cole and other officials predicted that data Credit Suisse provides will help drive taxpayers into an IRS amnesty program that has already drawn 43,000 Americans who paid $6 billion in back taxes and penalties to avoid prosecution. Prosecutors and the IRS also expect reams of data from 106 Swiss banks seeking non-prosecution agreements from the Justice Department.

Edward Robbins, a former tax prosecutor, said Credit Suisse walked away with a victory for the nation.

“Credit Suisse should get the Swiss bank secrecy award of the year for this move,” said Robbins, an attorney with Hochman Salkin Rettig Toscher & Perez. “What about the 20,000 tax cheats that are out there thumbing their noses at the U.S.?”