Julius Baer paid dearly to settle a criminal suit with U.S. tax investigators, but the Swiss private bank managed to keep two of its private bankers out of American jail. How?
Zurich-based Julius Baer's $547 million settlement with U.S. prosecutors is more than two years back, but it wasn't until recently that the Swiss bank could draw a line under the scandal for good. A court in New York's Southern District shut the case recently with a judgement against Julius Baer private banker Daniela Casadei, the bank confirmed to finews.asia.
She is one of two Julius Baer private bankers to face charges of setting set up sham accounts or using fictitious names like «Hydrangea» or «Red Rubin» to shield U.S. funds from tax. Unusually for a Swiss bank, Julius Baer stuck with Casadei, who was sentenced to one year's probation and a fine of several thousand U.S. dollars.
The bottom line is that the Swiss banker, who had been charged in 2011, won't go to jail. The district court justified its leniency with Casadei's «significant» cooperation, noting that no Swiss banker had been sentenced to jail time after helping investigators.
Hot Potatoes
Her Julius Baer colleague, Fabio Frazetto, received a similar sentence last year. The move means Julius Baer can put the U.S. tax case, settled for the overall bank in February 2016, behind for good. «We've taken note of the court's decision,» a spokesman for the bank told finews.asia.
«We're pleased that our colleague can conclude this chapter with an acceptable ruling, and look to the future unencumbered,» the spokesman said.
Both Casadei and Frazetto still work for Julius Baer – a departure from the «dropped like a hot potato»-treatment that private bankers received elsewhere when they ran into trouble with U.S. investigators.
Pictet on the Hook
Casadei and Frazetto represent an anomaly: they avoided jail, managed to put aside the long-simmering legal threat hanging over them, and also held onto their jobs. In standing by the private bankers, Julius Baer likely secured their loyalty.
The two had been accused of helping to hide $600 million from U.S. tax officials. The duo had originally pled not guilty, but reversed their decision and entered guilty please, and were released on a $1 million bond each pending trial.
Several of Julius Baer's rivals including Pictet, Zuercher Kantonalbank and Rahn & Bodmer are still waiting to settle criminal charges against them in the U.S.
