By ERIC TUCKER and MARCY GORDON
2014-05-20 06:01 AM
WASHINGTON (AP) -- The Justice Department on Monday charged Credit Suisse AG with helping wealthy Americans avoid paying taxes through offshore accounts, and a person familiar with the matter said the European bank has agreed to pay about $2.6 billion in penalties.
The charge was filed in a criminal information, which is a charging document that can only be filed with a defendant's consent and which typically signals a guilty plea.
The penalties will be paid to the Justice Department and to regulators, according to a person spoke on condition of anonymity because the guilty plea had not yet been announced.
A Justice Department news conference was scheduled for later Monday.
The penalty resolves a yearslong criminal investigation into allegations that the bank, Switzerland's second-largest, recruited U.S. clients to open Swiss accounts, helped them conceal the accounts from the Internal Revenue Service and enabled misconduct by bank employees. The case is part of an Obama administration crackdown on foreign banks believed to be helping U.S. taxpayers hide assets.
Attorney General Eric Holder, criticized last year after telling Congress that large banks had become hard to prosecute, appeared to foreshadow the guilty plea in a video message earlier this month in which he said no financial institution was "too big to jail."
The criminal case follows a Senate subcommittee investigation that found the bank provided accounts in Switzerland for more than 22,000 U.S. clients totaling $10 billion to $12 billion. The report said Credit Suisse sent Swiss bankers to recruit American clients at golf tournaments and other events, encouraged U.S. customers to travel to Switzerland and actively helped them hide their assets. In one instance, a Credit Suisse banker handed a customer bank statements hidden in a Sports Illustrated magazine during a breakfast meeting in the United States.
Credit Suisse chief executive Brady Dougan has said previously that senior executives at the bank were not aware that some Credit Suisse bankers were helping U.S. customers evade taxes. More than a half dozen former bankers have been charged for their role in aiding the tax evasion. The case was filed in federal court in suburban Alexandria, Virginia, where individual bankers have been charged.
The administration's action against Credit Suisse, a banking fixture on Wall Street, comes amid public outrage that boiled over from the financial crisis that plunged the economy into the deepest recession since the Great Depression of the 1930s. Calls for holding big Wall Street banks accountable, and sending top executives to jail, have come from consumer advocates, lawmakers and others, putting the Justice Department on the defensive.
The Justice Department's highest-profile settlement over sales of risky mortgage securities in the run-up to the financial crisis -- the $13 billion deal among the department, state regulators and JPMorgan Chase -- was a civil case, and no bank executives were charged. Federal prosecutors in California have been conducting a related criminal investigation.