In July, a total of eleven banks reached resolutions under DOJ’s Swiss Bank Program. Since 2013, the Swiss Bank Program has provided a path for Swiss banks to resolve potential criminal liabilities in the United States. In exchange for complying with certain requirements, including complete disclosure of possible tax-related criminal offenses in connection with undeclared U.S.-related accounts, the banks entered into non-prosecution agreements (“NPAs”) with DOJ. Under the NPAs, each bank must cooperate in related criminal or civil proceedings, show implementation of controls to stop tax-related misconduct, and pay penalties. To mitigate its penalty, each bank will encourage its U.S. accountholders to become compliant with their U.S. tax and disclosure obligations, including through participation in the IRS Offshore Voluntary Disclosure Program.
- Privatbank Von Graffenried AG signed an NPA with DOJ on July 2. Von Graffenried opened and maintained undeclared accounts for U.S. taxpayers and provided other services that it knew would help U.S. clients conceal income and assets from the IRS. For example, Von Graffenried held mail correspondence in order to keep documentation of the accounts outside of the United States. It also provided numbered account services so that bank statements and other documentation would not contain clients’ identifying information. Finally, Von Graffenried knowingly accepted noncompliant accounts and accounts from banks under DOJ investigation. Von Graffenried will pay a penalty of $287,000.
- Banque Pasche SA and Arvest Privatbank AG signed NPAs with DOJ on July 9. Banque Pasche provided hold mail service as well as code-named and numbered account services. It also helped U.S. taxpayers open undeclared accounts under the names of sham entities. Some of its accounts came from banks that it knew were being investigated by DOJ. Banque Pasche will pay a fine of $7.229 million. Arvest, which is no longer a licensed Swiss bank, knowingly opened and maintained undeclared accounts for U.S. clients. It also gave clients travel debit cards tied to accounts held under different names at the bank. Arvest will pay a penalty of $1.044 million.
- Mercantil Bank (Schweiz) AG, Banque Cantonale Neuchâteloise (“BCN”), and Nidwaldner Kantonalbank (“NKB”) signed NPAs with DOJ on July 16. All three banks opened and maintained accounts for U.S. clients who were not in compliance with their tax obligations. Mercantil helped clients evade tax obligations by providing hold mail service and accounts in the name of sham entities. It will pay a penalty of $1.172 million. BCN provided hold mail service, numbered accounts, and accounts in the name of non-operating entities. It will pay a penalty of $1.123 million. NKB offered hold mail service and numbered accounts. It also repeatedly waived requirements of an agreement it had with the IRS. NKB will pay a penalty of $856,000.
- SB Saanen Bank AG and Privatbank Bellerive AG signed NPAs with DOJ on July 23. SB Saanen provided hold mail service and code-named accounts. The bank took other steps to help clients conceal their undeclared funds, including by transferring accounts from other Swiss institutions that had closed them. SB Saanen will pay a penalty of $1.365 million. Bellerive repeatedly opened and maintained accounts for clients it knew or should have known were engaged in tax evasion. In two instances, U.S. accountholders created Panamanian corporations to conceal their assets. Then, they hired third parties in Panama to serve as the directors of the corporations and open accounts with Bellerive. The bank knew that U.S. residents were the true accountholders. Bellerive will pay a penalty of $57,000.
- PKB Privatbank AG, Falcon Private Bank AG and Credito Privato Comerciale in liquidazione SA (“CPC”) signed NPAs with DOJ on July 30. All three banks offered traditional Swiss banking services such as numbered accounts and hold mail service as well as a variety of other services that allowed U.S. clients to evade U.S. tax and information reporting obligations. PKB will pay a penalty of $6.328 million, Falcon will pay a penalty of $1.806 million and CPC will pay a penalty of $348,900. CPC has entered into voluntary liquidation and has decided to discontinue all of its relationships with U.S. customers.