US & Switzerland Deferred Prosecution
US & Switzerland Deferred Prosecution: Several Swiss Foreign Financial Institutions have entered into Deferred Prosecution Agreements with the U.S. The purpose of the Deferred Prosecution Agreement is to entice Swiss Banks and Financial Institutions to proactively get into compliance with the US Government, in order to both avoid prosecution and provide the US with the names of US Person Account Holders with numbered bank accounts and other secret accounts at these banks who have not reported their accounts to the IRS. In 2021, the latest bank in Switzerland (Rahn + Bodmer) has succumb to the pressure, and entered into a deferred prosecution Agreement.
As provided by the DOJ:
Zurich’s Oldest Private Bank Admits To Helping U.S. Taxpayers Hide Offshore Accounts From IRS
Rahn+Bodmer Enters into Deferred Prosecution Agreement for Criminal Misconduct; Agrees to Pay $22 Million
Audrey Strauss, United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Deputy Assistant Attorney General for the Department of Justice’s Tax Division, and James C. Lee, Chief of the Internal Revenue Service-Criminal Investigation (“IRS-CI”), announced the filing of a criminal Information against RAHN+BODMER CO. (“R+B”), a financial institution located in Zurich, Switzerland. The Information charges R+B with one count of conspiring to help U.S. accountholders evade their U.S. tax obligations, file false federal tax returns, and otherwise defraud the Internal Revenue Service (“IRS”) by hiding hundreds of millions of dollars in offshore bank accounts at R+B.
Ms. Strauss, Mr. Goldberg, and Mr. Lee also announced a deferred prosecution agreement with R+B (the “Agreement”), under which R+B admits to its unlawful conduct in assisting U.S. accountholders in violating their legal duties. R+B’s admissions are contained in a detailed Statement of Facts attached to the Agreement. The Agreement requires R+B to provide ongoing assistance to the Department of Justice and to pay a total of $22 million in restitution, forfeiture, and penalties. If R+B abides by all of the terms of the Agreement, the Government will defer prosecution on the Information for three years and then seek to dismiss the charge.
Manhattan U.S. Attorney Audrey Strauss said: “As Rahn+Bodmer now admits, it aided U.S. taxpayers in evading their tax responsibilities to the tune of more than $16 million. This venerated banking institution knowingly offered banking services that assisted its U.S. customers in evading their tax obligations, and affirmatively schemed to conceal from the IRS the assets and income of U.S. accountholders. Now Rahn+Bodmer will pay $22 million and commit to helping the Justice Department uncover tax evasion by U.S. customers.”
Acting Deputy Assistant Attorney General Stuart M. Goldberg said: “Under today’s resolution, Rahn+Bodmer is paying $22 million for helping U.S. accountholders evade their taxes, and has agreed to fully cooperate with investigations into those taxpayers. With the April 15 tax filing date fast approaching, there is a clear message for those intending not to pay their fair share – nothing remains hidden forever.”
IRS-CI Chief James C. Lee said: “Through a years-long scheme, the R+B bank hid the assets of U.S. accountholders to shield them from their tax obligations. Today’s admission and agreement provide a clear path to recovery of funds owed to the U.S. government, and sends a strong signal that offshore accounts are not beyond the reach of special agents with IRS CI.”
According to the Agreement, the accompanying Statement of Facts, and other documents filed today in Manhattan federal court:
From at least in or about 2004 and continuing until at least in or about 2012, R+B conspired with certain of its U.S. accountholders and others to defraud the United States with respect to taxes, file false federal tax returns, and commit tax evasion. R+B’s bankers assisted U.S. accountholders in concealing their ownership and control of assets and funds held in undeclared R+B accounts, which enabled those U.S. accountholders to evade their U.S. tax obligations. R+B admitted to holding undeclared accounts on behalf of approximately 340 U.S. taxpayers, who collectively evaded approximately $16.4 million in U.S. taxes between in or about 2004 and in or about 2012. The assets under management that R+B held for undeclared U.S. accountholders increased from approximately $391 million in 2004 to approximately $550 million in 2007, its peak year for undeclared assets under management.
In furtherance of the scheme to help U.S. taxpayers hide assets from the IRS and evade taxes, R+B undertook the following actions, among others:
R+B opened “numbered” or “pseudonym” accounts for U.S. accountholders in order to reduce the risk that U.S. tax authorities would learn their identities.
R+B opened and maintained accounts for U.S. accountholders in the names of non-U.S. corporations, foundations, trusts, or other legal entities, thereby helping U.S. taxpayers conceal their beneficial ownership of the accounts.
R+B agreed to hold bank statements and other account-related mail in Switzerland, rather than send them to the U.S. accountholders in the United States, which helped ensure that documents reflecting the existence of the accounts remained outside the United States and beyond the reach of U.S. tax authorities.
After Liechtenstein and the United States signed a Tax Information Exchange Treaty in December 2008, R+B transferred the undeclared assets of certain U.S. taxpayers from accounts held in the names of sham foundations organized under the laws of Liechtenstein to new accounts held in the names of new sham foundations organized under the laws of Panama, in an effort to further conceal the accounts from U.S. tax authorities.
R+B allowed U.S. accountholders and third-party asset managers to make withdrawals by check from undeclared accounts in amounts of less than $10,000, in an apparent attempt to conceal transactions from U.S. authorities.
On occasion, R+B opened accounts for U.S. taxpayers who were exiting UBS AG and other Swiss banks, and allowed these U.S. taxpayers to continue to conceal their undeclared assets at R+B. R+B additionally opened “escrow” accounts on behalf of a Swiss attorney to facilitate the transfer of undeclared assets of U.S. accountholders that had been converted to gold and other precious metals held in a vault at UBS.
R+B helped U.S. accountholders to repatriate funds to the United States in a manner designed to ensure that U.S. tax authorities did not discover the undeclared accounts, including by transferring the funds of one U.S. accountholder in increments of approximately $100,000 to another Swiss bank before the U.S. accountholder routed the funds to a diamond dealer in Manhattan, where the U.S. accountholder ultimately received them.
R+B, through its bankers, made regular visits to the United States to solicit, open, and service undeclared accounts of U.S taxpayers.
Under today’s resolution, R+B is required to cooperate fully with the Department of Justice and affirmatively disclose new information it may later uncover regarding U.S.-related accounts. R+B is also required to disclose information consistent with the Department’s Swiss Bank Program relating to accounts closed between January 1, 2009, and December 31, 2019.
As part of the resolution, R+B will pay a total of $22 million, which has three parts. First, R+B has agreed to pay $4.9 million in restitution to the IRS, which represents the estimated unpaid taxes resulting from R+B’s participation in the conspiracy. Second, R+B has agreed to forfeit $9.7 million to the United States, which represents the approximate gross fees that R+B earned on its undeclared U.S.-related accounts between 2004 and 2012. Finally, R+B has agreed to pay a penalty of $7.4 million.
The penalty takes into consideration that R+B conducted a thorough internal investigation and provided a substantial volume of documents to the Department, as well as implemented remedial measures to protect against the use of its services for tax evasion in the future.
Current List of Swiss Deferred Prosecution Agreements
Here is a list of the most recent Swiss Deferred Prosecution Agreements (the DOJ page has not been updated yet to include Rahn + Bodmer.
|NUMBER||BANK NAME||DATE||PRESS RELEASE||NPA and Attachments|
|1||BSI SA||3/30/15||Press Release||
NPA and SOF (176.16 KB)
Statement of Facts (209.47 KB)
Board Resolution (64.37 KB)
|2||Vadian Bank AG||5/8/15||Press Release||NPA and SOF (406.6 KB)|
|3||Finter Bank Zurich||5/15/15||Press Release||NPA and SOF (24.14 MB)|
|4||Société Générale Private Banking (Lugano-Svizzera)||5/28/15||Press Release||NPA and SOF (403.13 KB)|
|5||MediBank AG||5/28/15||Press Release||NPA and SOF (315.33 KB)|
|6||LBBW (Schweiz) AG||5/28/15||Press Release||NPA and SOF (338.89 KB)|
|7||Scobag Privatbank AG||5/28/15||Press Release||NPA and SOF (396.38 KB)|
|8||Rothschild Bank AG||6/3/15||Press Release||NPA and SOF (444.58 KB)|
|9||Banca Credinvest SA||6/3/15||Press Release||NPA and SOF (506.47 KB)|
|10||Société Générale Private Banking (Suisse) SA||6/9/15||Press Release||NPA and SOF (433.58 KB)|
|11||Berner Kantonalbank AG||6/9/15||Press Release||NPA and SOF (411.23 KB)|
|12||Bank Linth LLB AG||6/19/15||Press Release||NPA and SOF (566.31 KB)|
|13||Bank Sparhafen Zurich AG||6/19/15||Press Release||NPA and SOF (439.96 KB)|
|14||Ersparniskasse Schaffhausen AG||6/26/15||Press Release||NPA and SOF (3.16 MB)|
|15||Privatbank Von Graffenried AG||7/2/15||Press Release||NPA and SOF (5.13 MB)|
|16||Banque Pasche SA||7/9/15||Press Release||NPA and SOF (4.05 MB)|
|17||ARVEST Privatbank AG||7/9/15||Press Release||NPA and SOF (3.84 MB)|
|18||Mercantil Bank (Schweiz) AG||7/16/15||Press Release||NPA and SOF (336.05 KB)|
|19||Banque Cantonale Neuchâteloise||7/16/15||Press Release||NPA and SOF (353.24 KB)|
|20||Nidwaldner Kantonalbank||7/16/15||Press Release||NPA and SOF (383.84 KB|
|21||SB Saanen Bank AG||7/23/15||Press Release||NPA and SOF (4.14 MB)|
|22||Privatbank Bellerive AG||7/23/15||Press Release||NPA and SOF (3.19 MB)|
|23||PKB Privatbank AG||7/30/15||Press Release||NPA and SOF (3.19 MB)|
|24||Falcon Private Bank AG||7/30/15||Press Release||NPA and SOF (3.97 MB)|
|25||Credito Privato Commerciale in liquidazione SA||7/30/15||Press Release||NPA and SOF (2.24 MB)|
|26||Bank EKI Genossenschaft||8/3/15||Press Release||NPA and SOF (5.59 MB)|
|27||Privatbank Reichmuth & Co.||8/6/15||Press Release||NPA and SOF (3.49 MB)|
|28||Banque Cantonale du Jura SA||8/6/15||Press Release||NPA and SOF (4.57 MB)|
|29||Banca Intermobiliare di Investimenti e Gestioni (Suisse) SA||8/6/15||Press Release||NPA and SOF (3.62 MB)|
|30||Bank Zweiplus Ag||8/20/15||Press Release||NPA and SOF (3.37 MB)|
|31||Banca dello Stato del Cantone Ticino||8/20/15||Press Release||NPA and SOF (3.88 MB)|
|32||Hypothekarbank Lenzburg AG||8/27/15||Press Release||NPA and SOF (392.71 KB)|
|33||Schroder & Co. Bank AG||9/3/15||NPA and SOF (4.04 MB)|
|34||Valiant Bank AG||9/10/15||Press Release||NPA and SOF (13.3 MB)|
|35||Bank La Roche & Co AG||9/15/15||Press Release||NPA and SOF (344.31 KB)|
|36||St. Galler Kantonalbank AG||9/17/15||Press Release||NPA and SOF (1.49 MB)|
|37||E. Gutzwiller & Cie, Banquiers||9/17/15||Press Release||NPA and SOF (2.28 MB)|
|38||Migros Bank AG||9/25/15||Press Release||NPA and SOF (503.35 KB)|
|39||Graubündner Kantonalbank||9/25/15||Press Release||NPA and SOF (390.52 KB)|
|40||BHF-Bank (Schweiz) AG||10/1/15||Press Release||NPA and SOF (2.44 MB)|
|41||Schaffhauser Kantonalbank||10/8/15||Press Release||NPA and SOF (897.82 KB)|
|42||BBVA Suiza S.A.||10/16/15||Press Release||NPA and SOF (2.74 MB)|
|43||Piguet Galland & Cie SA||10/23/15||Press Release||NPA and SOF (2.79 MB)|
|44||Luzerner Kantonalbank AG||10/29/15||Press Release||NPA and SOF (391.78 KB)|
|45||Habib Bank AG Zurich (HBZ)||10/29/15||Press Release||NPA and SOF (509.23 KB)|
|46||Banque Heritage S.A.||10/29/15||Press Release||NPA and SOF (352.61 KB)|
|47||Hyposwiss Private Bank Genève S.A.||10/29/15||Press Release||NPA and SOF (425.12 KB)|
|48||Banque Bonhôte & Cie SA||11/3/15||Press Release||NPA and SOF (368.33 KB)|
|49||Banque Internationale à Luxembourg (Suisse) SA||11/12/15||Press Release||NPA and SOF (400.06 KB)|
|50||Zuger Kantonalbank||11/12/15||Press Release||NPA and SOF (382.13 KB)|
|51||Standard Chartered Bank (Switzerland) SA||11/13/15||Press Release||NPA and SOF (472.58 KB)|
|52||Maerki Baumann & Co. AG||11/17/15||Press Release||NPA and SOF (460.31 KB)|
|53||BNP Paribas (Suisse) SA||11/19/15||Press Release||NPA and SOF (497.99 KB)|
|54||KBL (Switzerland) Ltd.||11/19/15||Press Release||NPA and SOF (469.25 KB)|
|55||Bank CIC||11/19/15||Press Release||NPA and SOF (388.06 KB)|
|56||Privatbank IHAG Zürich AG||11/24/15||Press Release||NPA and SOF (464.83 KB)|
|57||Deutsche Bank (Suisse) SA||11/24/15||Press Release||NPA and SOF (431.79 KB)|
|58||EFG Bank European Financial Group SA, Geneva, and EFG Bank AG||12/3/15||Press Release||NPA and SOF (588.89 KB)|
|59||Aargauische Kantonalbank||12/8/15||Press Release||NPA and SOF (468.96 KB)|
|60||Cornèr Banca SA||12/10/15||Press Release||NPA and SOF (446.77 KB)|
|61||Bank Coop AG||12/10/15||Press Release||NPA and SOF (404.48 KB)|
|62||Crédit Agricole (Suisse) SA||12/15/15||Press Release||NPA and SOF (454.09 KB)|
|63||Dreyfus Sons & Co Ltd, Banquiers||12/15/15||Press Release||NPA and SOF (512.32 KB)|
|64||Baumann & Cie, Banquiers||12/15/15||Press Release||NPA and SOF (453.32 KB)|
|65||Bordier & Cie Switzerland||12/17/15||Press Release||NPA and SOF (394.78 KB)|
|66||PBZ Verwaltungs AG||12/17/15||NPA and SOF (582.22 KB)|
|67||PostFinance AG||12/17/15||NPA and SOF (385.3 KB)|
|68||Edmond de Rothschild (Suisse) SA and Edmond de Rothschild (Lugano) SA||12/18/15||Press Release||NPA and SOF (480.3 KB)|
|69||Bank J. Safra Sarasin AG||12/23/15||Press Release||NPA and SOF (447.66 KB)|
|70||Coutts & Co Ltd||12/23/15||Press Release||
NPA and SOF (460.87 KB)
|71||Gonet & Cie||12/23/15||Press Release||NPA and SOF (372.35 KB)|
|72||Banque Cantonal du Valais||12/23/15||Press Release||NPA and SOF (481.25 KB)|
|73||Banque Cantonale Vaudoise||12/23/15||Press Release||NPA and SOF (392.63 KB)|
|74||Bank Lombard Odier & Co Ltd||12/31/15||Press Release||NPA and SOF|
|75||DZ Privatbank (Schweiz) AG||12/31/15||Press Release||NPA and SOF|
|76||Union Bancaire Privée, UBP SA||1/6/16||Press Release||
NPA and SOF (495.2 KB)
|77||Leodan Privatbank AG||1/20/16||Press Release||NPA and SOF (496.86 KB)|
|78||HSZH Verwaltungs AG||1/27/16||Press Release||NPA and SOF (756.21 KB)|
|79||NPB Neue Privat Bank||7/18/18||Press Release|
|80||Mirelis Holding||7/24/18||Press Release|
|81||Lombard Odier||7/31/18||Press Release||NPA Addendum|
Banque Bonhote & Cie SA
|7/19/19||Press Release||Banque Bonhote & Cie SA Addendum|
|83||Coutts & Co Ltd||12/23/19||Press Release||Coutts & Co Ltd – Addendum|
|84||Union Bancaire Privée, UBP SA||1/6/20||Press Release||Union Bancaire Privée, UBP SA – Addendum|
Deferred Prosecution Agreements are Still Active
In conclusion, the US Government still pursues foreign banks and other financial institutions and pressures them to get them to enter into deferred prosecution agreements in order to uncover US Account Holders with secret or hidden accounts. If you are in this situation, you may consider entering into an offshore disclosure before it is too late.
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