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Credit Suisse pleads guilty to helping 'tax cheats' Credit Suisse pleads guilty to helping 'tax cheats'
(about 3 hours later)
Swiss banking giant Credit Suisse has pleaded guilty to helping some US clients evade paying taxes to the US government and agreed to pay a $2.6bn (£1.5bn) fine. Swiss banking giant Credit Suisse has pleaded guilty to helping thousands of US clients evade paying taxes to the US government and agreed to pay a $2.6bn (£1.5bn) fine.
It is the biggest bank to plead guilty to criminal charges in the US in more than 20 years.It is the biggest bank to plead guilty to criminal charges in the US in more than 20 years.
US attorney general Eric Holder said the bank helped US "tax cheats dodge US taxes".US attorney general Eric Holder said the bank helped US "tax cheats dodge US taxes".
Credit Suisse said in a statement it deeply regretted the past misconduct.Credit Suisse said in a statement it deeply regretted the past misconduct.
The bank said the settlement would reduce its second-quarter net profit by 1.6bn Swiss Francs ($1.8bn; £1bn).The bank said the settlement would reduce its second-quarter net profit by 1.6bn Swiss Francs ($1.8bn; £1bn).
The $2.6bn payment is the highest in a US criminal tax investigation to date, according to US authorities.
However, as part of the agreement with US regulators, the bank will not lose its banking licence in the US.However, as part of the agreement with US regulators, the bank will not lose its banking licence in the US.
The bank's chief executive, Brady Dougan, said: "Having this matter fully resolved is an important step forward for us. We have seen no material impact on our business resulting from the heightened public attention on this issue in the past several weeks." The bank does not expect its UK and Swiss banking licences to be affected.
Credit Suisse chief executive Brady Dougan said: "Having this matter fully resolved is an important step forward for us.
"We have seen no material impact on our business resulting from the heightened public attention on this issue in the past several weeks."
'Elaborate lengths''Elaborate lengths'
Mr Holder told a press conference: "The bank went to elaborate lengths to shield itself, its employees, and the tax cheats it served, from accountability for their criminal actions."Mr Holder told a press conference: "The bank went to elaborate lengths to shield itself, its employees, and the tax cheats it served, from accountability for their criminal actions."
"They subverted disclosure requirements, destroyed bank records, and concealed transactions involving undeclared accounts by limiting withdrawal amounts and using offshore credit and debit cards to repatriate funds.""They subverted disclosure requirements, destroyed bank records, and concealed transactions involving undeclared accounts by limiting withdrawal amounts and using offshore credit and debit cards to repatriate funds."
He added that the tax evasion schemes went back decades, saying that in one case, the practice of using sham entities began more than 100 years ago.He added that the tax evasion schemes went back decades, saying that in one case, the practice of using sham entities began more than 100 years ago.
The US Department of Justice said Credit Suisse "operated an illegal cross-border banking business" that helped thousands of US customers conceal offshore assets and income from US tax authorities.
However, according to US media reports, neither Credit Suisse chairman Urs Rohner nor chief executive Brady Dougan are expected to lose their jobs as a result of the agreement.However, according to US media reports, neither Credit Suisse chairman Urs Rohner nor chief executive Brady Dougan are expected to lose their jobs as a result of the agreement.
US authorities have already indicted eight Credit Suisse employees who helped clients evade taxes. Mr Dougan told investors on Tuesday he had not encountered pressure to step down.
"My focus has been on resolving the issue and taking the business forward, so no, that's never been a consideration," he said. "We're working very very hard to fix this business."
Credit Suisse will meet most of the cost of the fine by selling some of its risky assets, the bank's chief financial officer David Mathers said.
Since 2011 US authorities have indicted eight Credit Suisse employees who helped clients evade taxes.
Credit Suisse is not alone. US prosecutors are chasing more than a dozen other Swiss banks for allegedly helping wealthy Americans dodge US taxes, and at the press conference, they hinted that there would be more settlements to come.Credit Suisse is not alone. US prosecutors are chasing more than a dozen other Swiss banks for allegedly helping wealthy Americans dodge US taxes, and at the press conference, they hinted that there would be more settlements to come.
In 2009, another Swiss bank, UBS, settled similar charges with US regulators for $780m as well as an agreement in which the bank would give US authorities the names of its so-called "secret" account holders.In 2009, another Swiss bank, UBS, settled similar charges with US regulators for $780m as well as an agreement in which the bank would give US authorities the names of its so-called "secret" account holders.