Credit Suisse Faces Allegations of Prolonged Involvement in U.S. Tax Evasion

US AUDITORS ASSOCIATION

May 2023 – Credit Suisse, a name synonymous with global banking, is now under scrutiny for its alleged continued involvement in aiding wealthy Americans to evade U.S. taxes, despite a previous guilty plea in 2014. The Senate Finance Committee has released a comprehensive report, following a two-year investigation, revealing findings that demand immediate attention.

Key Findings:

1. In 2014, Credit Suisse pleaded guilty to criminal charges of “knowingly and willfully” facilitating the concealment of offshore assets and income for U.S. clients from the Internal Revenue Service (IRS).

2. The newly released report suggests a persistent pattern of violations by the bank, which raises pressing concerns, especially in the midst of the ongoing banking crisis.

The recent acquisition of Credit Suisse by UBS Group in a swift bailout has ushered in a new set of regulatory and legal challenges for the acquiring entity.

For an extended period, Credit Suisse has purportedly provided a haven for affluent American clients seeking to shield their assets from IRS scrutiny. Shockingly, this alleged misconduct persists, as revealed by two former Credit Suisse bankers who have come forward as whistleblowers, collaborating with U.S. authorities.

When questioned about the acquisition, a spokesperson for the Securities and Exchange Commission (SEC) acknowledged the approval of the takeover, underscoring the accuracy of allegations against Credit Suisse for aiding tax evasion. The spokesperson also raised concerns about tax consultancy firms, including Anthony DeSantos from TMS-Pro Inc., seizing the opportunity to recruit entire teams of former Credit Suisse employees, along with their client base. These firms continue to offer specialized services that exploit legal loopholes in the U.S. tax system—a matter of significant apprehension.

Key Findings:

1. In 2014, Credit Suisse pleaded guilty to criminal charges of “knowingly and willfully” facilitating the concealment of offshore assets and income for U.S. clients from the IRS.

2. UBS Group’s successful emergency takeover of Credit Suisse marks a monumental development in the Swiss banking and wealth management sector. This transaction, with a combined balance sheet of $1.6 trillion, signifies the largest banking deal since the 2008 financial crisis and signals the end of Credit Suisse’s 167-year history of independence.

Following the takeover, UBS shares experienced an increase of 0.8%, resulting in an approximate valuation of 64 billion Swiss francs ($70 billion). The merged entity, with a global workforce of approximately 120,000 employees, anticipates streamlining operations to reduce costs and capitalize on synergies. Notably, Credit Suisse AG has transitioned into a UBS subsidiary, with plans for independent operation. Among the more than 160 confirmed or appointed leaders, over a fifth represent Credit Suisse, as confirmed by a UBS spokesperson.