GENEVA: Switzerland’s second-largest bank, Credit Suisse, accused by Washington of helping US clients hide billions from the taxman, acknowledged yesterday there had been “misconduct” by some of its employees but said management was unaware.
“Credit Suisse acknowledges that misconduct, centred on a small group of Swiss-based private bankers, previously occurred at our bank,” it said in a statement submitted to the US Senate, insisting that the bank management had no knowledge of the misdeeds at the time.
The document included the statement Credit Suisse chief Brady Dougan was set to give before a US Senate panel. On Tuesday, a scathing Senate inquiry showed his bank had used elaborate measures to help some 19,000 wealthy US clients evade taxes. “We deeply regret that, despite the industry-leading compliance measure we have put in place, before 2009, some Credit Suisse private bankers appear to have violated US law,” the statement said, citing a “broad and deep” independent investigation commissioned by the bank.
The internal probe “found no evidence that Credit Suisse’s executive management was aware of these problems,” it said. However, it added that “we accept responsibility for and deeply regret these employees’ actions”.
The US Senate report, based on a two-year investigation, maintained that Credit Suisse had “nearly 19,000 US customers with hidden Swiss assets totalling nearly $5bn” as of 2006.
That figure represents some 85 percent of the bank’s more than 22,000 US customers in 2006 with Swiss accounts whose assets at their highest exceeded $13.5bn, the report said. Douglas Hornung, a Swiss business lawyer specialised on the banking sector said Credit Suisse could face a US fine of around $2bn for its misdeeds.
Senator Carl Levin, chairman of the Senate subcommittee that led the investigation, certainly took a combative tone on Monday.
Among the bank’s cloak-and-dagger practices revealed in the Senate report, Swiss bankers were sent to the United States to secretly find clients, leaving no paper trail, at events sponsored by the bank — such as at golf tournaments in Florida. Levin cited testimony from former Credit Suisse clients about being taken to meetings in Zurich on a secret, buttonless elevator controlled remotely, and receiving secret bank statements hidden inside magazines.
In 2008, there were more than 1,800 Credit Suisse bankers employed to manage US client accounts, many of which were never declared to the IRS. Transactions were said to be structured to avoid US tax reporting requirements.AFP
