Dec. 5 (UPI) — Major Swiss bank Banque Pictet has admitted to helping U.S. taxpayers hide billions of taxable funds from the Internal Review Service with the use of secret accounts, the Justice Department said.
Federal prosecutors on Monday said that between 2008 and 2014, Banque Pictet, the private banking division of the nearly 218-year-old Pictet Group, held approximately $5.6 billion in 1,637 accounts for U.S. taxpayers, helping them evade paying the IRS some $50.6 million in taxes.
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As part of the deferred prosecution agreement announced Monday by the Justice Department, Banque Pictet agrees to pay some $122.9 million to the U.S. Treasury and to continue cooperating with the federal government.
“This case should provide a clear message to others who try to hide their assets and income offshore,” IRS Criminal Investigation Chief Jim Lee said in a statement.
“Offshore tax evasion is a priority for IRS Criminal Investigation, and today’s deferred prosecution agreement with Bank Pictet collects more than $120 million owed to the U.S. government.”
Prosecutors said the Pictet Group specifically helped its clients evade paying U.S. taxes by opening and maintaining undeclared accounts. The bank was also found to have maintained accounts of certain U.S.-taxpayer clients within its group that allowed further concealment of undeclared accounts, and that its employees either knew or should have known some of their clients where sidestepping their responsibilities to the U.S. federal government.
“In every instance, managing partners approved the opening of new private client relationships and were informed of the closing of U.S. taxpayer-clients’ accounts, which included some undeclared accounts,” the Justice Department said Monday.
Of the money Banque Pictet has agreed to pay the United States, more than $52 million represents gross fees it earned on its undeclared accounts, nearly $32 million in restitution to the IRS in unpaid taxes resulting from its participation in the conspiracy and a penalty of nearly $39 million.
If Banque Pictet continues to comply with the agreement, prosecutors agree to defer its prosecution for three years, after which it will seek to dismiss the criminal charges against the bank, the federal department explained.
In a statement, Banque Pictet said the amount it agreed to pay will come from its general provisions and profits.
“This resolution follows Pictet’s extensive cooperation with the U.S. authorities, in full compliance with Swiss law,” it said.
“Pictet is pleased to have resolved this matter and will continue to take steps to ensure its clients meet their tax obligations.”
