Permanent Subcommittee on Investigations (PSI) of the United States Senate will hold a hearing, “Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts,” on Wednesday, February 26, 2014, beginning at 9:30 a.m., in Room G-50 of the Dirksen Senate Office Building.
The PSI hearing on February 26 is for the stated purpose of continuing the PSI’s examination of tax haven bank facilitation of U.S. tax evasion, focusing on the status of efforts to hold Swiss banks and their U.S. clients accountable for unpaid taxes on billions of dollars in hidden assets. Witnesses include representatives from Credit Suisse and the U.S. Department of Justice.
The report alleges that Credit Suisse Group AG helped thousands of U.S. taxpayers hide billions in assets offshore. The report shows that Credit Suisse opened Swiss accounts for more than 22,000 U.S. customers that, at their peak, totaled between $10 billion and $22 billion. The “vast majority” of these accounts were hidden from the U.S. and despite years of investigations by the Justice Department, the bank has turned over just 238 names to U.S. authorities.
22,000 U.S. Customers with 12 Billion Swiss Francs. The investigation found that, as of 2006, Credit Suisse had over 22,000 U.S. customers with Swiss accounts whose assets, at their
peak, exceeded 12 billion Swiss francs (CHF). Although Credit Suisse has not determined or
estimated how many of those accounts were hidden from U.S. authorities, the data suggests the
vast majority were undeclared. To date, due to Swiss Government restrictions, the United States
has obtained the names of only about 230 U.S. clients with hidden accounts at Credit Suisse.
Recruiting U.S. Clients and Facilitating Secrecy. The investigation found that, from at
least 2001 to 2008, Credit Suisse recruited U.S. clients to open Swiss accounts, and employed a
number of banking practices that helped its U.S. customers conceal their Swiss accounts from
U.S. authorities. Those practices included:
Sending Swiss bankers to the United States to secretly recruit clients and service existing accounts;
Sponsoring a New York office that served as a hub of activity on U.S. soil for Swiss bankers; and helping customers mask their Swiss accounts by referring them to “intermediaries” that could form offshore shell entities for them and by opening accounts in the name of those offshore entities.
One former customer described how, on one occasion, a Credit Suisse banker travelled to the United States to meet with the customer at the Mandarin Oriental Hotel and, over breakfast, handed the customer bank statements hidden in a Sports Illustrated magazine.
Credit Suisse also sent Swiss bankers to recruit clients at bank sponsored events, including the annual “Swiss Ball” in New York and golf tournaments in Florida. The Credit Suisse New York office kept a document listing “important phone numbers”of intermediaries that formed offshore shell entities for some of the bank’s U.S. customers.
Credit Suisse also encouraged U.S. customers to travel to Switzerland, providing them with a branch office at the Zurich airport offering a full range of banking services.
Nearly 10,000 U.S. customers availed themselves of that convenience.
The bank’s own investigation indicates that Swiss bankers were well aware that some U.S. clients wanted to conceal their accounts from U.S. authorities, and either turned a blind eye to the accounts’ undeclared status, or at times actively assisted those accountholders to hide assets from U.S. authorities.
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