Banking Law

Credit Suisse will pay $2.6B in tax evasion case, but won't have to identify US clients

Credit Suisse pleaded guilty on Monday to a criminal charge of conspiring to aid tax evasion and agreed to pay about $2.6 billion in penalties.

According to the New York Times DealBook blog, Credit Suisse is the most prominent bank to plead guilty to a criminal charge in the United States since 1989, and the largest bank to plead guilty since 1999. The United States alleged that the bank conspired to help thousands of Americans conceal assets and income from the Internal Revenue Service, the Wall Street Journal (sub. req.) reports. The Justice Department announcement is here and a Reuters story is here.

Anonymous sources told Dealbook that prosecutors wanted to punish Credit Suisse without putting it out of business. Last week, the Securities and Exchange Commission reportedly gave the bank an exemption from a federal law requiring revocation of a bank’s investment-adviser license in the event of a guilty plea, the story says.

The plea deal does not force the bank to reveal the names of American account holders. However, Deputy Attorney General James Cole said the bank will turn over information that will help prosecutors find the account holders, according to the Wall Street Journal story.

Credit Suisse’s top lawyer, Romeo Cerutti, had sought a deferred prosecution agreement, but “his entreaties fell flat,” DealBook says in this separate story about the negotiations.

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