Two Swiss Banks Disclose Accounts to Avoid Prosecution

by Bruce Givner on July 13, 2015

On June 19, two Swiss banks agreed to pay penalties totaling nearly $6 million in order to avoid prosecution under the Department of Justice’s program which requires Swiss firms to disclose how they helped their American clients avoid taxes.

The two banks, Bank Linth LLB AG and Bank Sparhafen Zurich AG, are only the latest banks to settle with the DOJ. The former, which had 126 US-related accounts since 2008 and a total of $102 million in assets, will pay a $4.15 million penalty, while the latter, which had 91 US-related accounts since 2008 and more than $25 million in assets, will pay $1.81 million in penalties. A total of 13 Swiss banks have agreed to pay a combined $256.8 million in penalties since March 30. At the end of 2013, more than 100 Swiss companies had entered the DOJ program.

By entering the DOJ program, banks are able to avoid prosecution by providing details of their cross-border business to the Justice Department, including sharing the account information of their American clients. However, several Swiss banks are barred from entering the program as they are currently under criminal investigation. Credit Suisse Group AG’s main bank subsidiary, for example, pleaded guilty in 2014 and paid a steep $2.6 billion fine.

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