Despite being convicted in the U.S. seven years ago, Credit Suisse allegedly did not keep its side of the bargain. Instead, it continued to look after at least one tax evader. Now former CS employees are seeking a new trial against the major Swiss bank.
Former employees of Credit Suisse (CS) are urging U.S. authorities to initiate new proceedings against the Swiss bank, according to a «Bloomberg» report on Friday. Specifically, the case involves allegations that CS engaged in further such dealings with at least one client following its conviction for aiding and abetting tax evasion seven years ago. The so-called «whistleblowers» have made representations to the U.S. tax authority, the Internal Revenue Service (IRS).
In 2014, CS had paid a settlement payment totaling $2.6 billion, which was then still partially reduced. Now, however, the case is to be reopened, involving the account of client Dan Horsky, whom CS had apparently misappropriated as part of its settlement with the U.S. Justice Department.
New Justice Department
«With a new Justice Department, there is hope that Credit Suisse will finally be held accountable,» said attorney Jeffrey Neiman, who represents former CS bankers who believe the big Swiss bank violated the agreement at the time. If a new indictment is indeed filed, CS would again be at risk of losing its business license in the U.S. or having it temporarily suspended.
A CS spokeswoman declined to comment to «Bloomberg». The Justice Department and IRS did not immediately respond to a request for comment.
Illustrious Figure
Former CS client Horsky is an illustrious figure. He is a seriously wealthy economics professor of Israeli-American origin who once also lectured to MBA students at the Universities of Rochester and Bern.
He kept several hundred million dollars of his wealth hidden from the U.S. tax authorities for years. Among others, at CS. When the matter came to light, Horsky, now 75, was sentenced to seven months in prison and fined $124 million.
Toxic Accounts
By further accounts, he had cooperated with authorities during the investigation against him, providing information about his relationships with banks and client advisers. In the process, he had also recorded telephone conversations with CS advisers.
It is still unclear why CS did not report this case as part of its settlement with the U.S. authorities, especially since the Horsky accounts were considered «toxic» in the bank's Israel department because they had been hidden from the tax authorities using methods like those that led to Credit Suisse's guilty plea.
Serious Consequences
Speaking to finews.com four years ago, a CS spokesman said, «Following our settlement in 2014, Credit Suisse continues to cooperate fully with the U.S. authorities, working closely with the monitor appointed in conjunction with the NY DFS to identify individuals who may have sought to avoid their U.S. tax obligations.»
If the major Swiss bank is now proven to have engaged in misconduct again, the consequences would likely be severe.
