Banque Pictet et Cie SA entered into a deferred prosecution agreement with the U.S. Department of Justice for its role in facilitating offshore tax evasion by U.S. taxpayers.
Banque Pictet et Cie SA, a Swiss private bank, admitted today to conspiring with U.S. taxpayers and others to hide more than $5.6 billion in secret bank accounts in Switzerland and elsewhere and to conceal the income generated in those accounts from the IRS.
The bank entered into a deferred prosecution agreement with the U.S. Department of Justice and agreed to pay approximately $122.9 million to the U.S. Treasury. The agreement is part of a series of cases by the Justice Department in connection with its investigations since 2008 into facilitation of offshore U.S. tax evasion by foreign banks.
According to court documents, Banque Pictet and its affiliates helped U.S. taxpayers use coded accounts, foreign trusts and entities, nominee beneficiaries and other deceits to conceal their income and assets abroad. The bank also failed to comply with the U.S.-Swiss tax treaty and did not disclose the identities of U.S. account holders to the IRS.
The case was assigned to U.S. District Judge Edgardo Ramos for the Southern District of New York.
Officials from the Justice Department, the U.S. Attorney’s Office and the IRS commented on the case.
Acting Deputy Assistant Attorney General Stuart M. Goldberg said that Banque Pictet’s criminal conduct resulted in the bank paying nearly $122.9 million in restitution, disgorgement of fees and a financial penalty, and that the bank was required to fully cooperate with investigations relating to these secret accounts.
U.S. Attorney Damian Williams for the Southern District of New York said that Banque Pictet knowingly conspired to conceal from the IRS the income generated by accounts which held more than $5.6 billion, and that the bank agreed to pay more than $122.9 million and to continue to cooperate with the Department of Justice. He also said that rooting out financial malfeasance remained a priority for his office, and that he encouraged companies and financial institutions to come forward to report wrongdoing before they were approached by the authorities.
IRS Criminal Investigation Chief Jim Lee said that this case should provide a clear message to others who try to hide their assets and income offshore, and that his special agents were experts in following the money and uncovering schemes that try to defraud the U.S. tax system. He also said that offshore tax evasion was a priority for IRS Criminal Investigation, and that today’s deferred prosecution agreement with Banque Pictet collected more than $120 million owed to the U.S. government.
Banque Pictet is one of the oldest and largest private banks in Switzerland.
Banque Pictet is one of the oldest and largest private banks in Switzerland, founded in 1805 and headquartered in Geneva. The bank operates two main business divisions: institutional asset management and private banking for individuals. As of Dec. 31, 2014, the bank had approximately 3,800 employees in various locations, primarily in Switzerland, but also in Luxembourg, Hong Kong, Singapore and the Bahamas.
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