Swiss Bank Confesses To Helping Hide Money From the IRS

Swiss Bank Confesses To Helping Hide Billions From the IRS

( – According to the Justice Department, Banque Pictet, a prominent bank in Switzerland, admitted that it helped American citizens and companies hide billions of dollars from the IRS.

The bank managed over 1,600 accounts for Americans who used them to avoid over $50 million in tax payments between 2008 and 2014. Together, those accounts held $5.6 billion.

The IRS struck a deal with the bank to defer prosecution before dismissing criminal charges related to fraud and conspiracies against the IRS. In exchange, the bank must cooperate entirely with the agency’s investigation of the accounts. The bank must also pay a fine totaling over $120 million.

US Attorney for the Southern District of New York Damian Williams said that cracking down on tax fraud cases is a priority for his office. He also warned guilty parties to report themselves before they’re discovered. They may incur less severe penalties.

American entrepreneurs and businesses have long used Swiss bank accounts to avoid heavy tax penalties in the US. However, the IRS began cracking down on Swiss banks in the mid-2000s. At the time, most banks almost immediately agreed to deferred action agreements in exchange for full cooperation with US officials.

Still, some Swiss banks still reported the income of American account holders to the federal government without their knowledge. This occurred even before the crackdowns began. Also, calls to those banks have usually always been recorded.

However, prosecutors claimed that Pictet guided their clients in the opening of accounts that would be concealed from US authorities. They implemented several mechanisms to protect information related to individuals and financial transactions. It also kept the clients’ letters on its own premises to avoid sending them to US addresses.

The bank also maintained hundreds of offshore entities to move and manage funds more discreetly. Clients were advised to avoid withdrawing more than $10,000 to avoid mandatory IRS reporting.

Officials at Pictet said in a statement that they were “pleased” to resolve the issue with the IRS.

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