Whistleblowers claim that Credit Suisse continued to help wealthy Americans avoid paying taxes after the Swiss bank promised the U.S. Department of Justice (DOJ) that it would cease doing so in a 2014 guilty plea deal. The lawyer of the whistleblowers, who are former employees of Credit Suisse, sent a letter to the U.S. Internal Revenue Service (IRS) Whistleblower Office detailing the allegations in early March, according to Bloomberg.
The whistleblowers allege that Credit Suisse continued to hide the assets of wealthy Americans long after it swore to U.S. prosecutors that it closed those accounts. In the letter, the whistleblowers’ attorney claims that Credit Suisse’s “conspiracy” to help Americans hide their wealth from U.S. tax collectors “continued well after the plea agreement and sentencing of Credit Suisse in 2014 and may continue to be in existence today.” The whistleblowers claim that Credit Suisse lied to U.S. authorities during investigations into how Swiss bank’s aided Americans in defrauding the government.
In the 2014 plea deal, Credit Suisse pled guilty to a charge of conspiring to aid tax evasion. According to The New York Times, “Credit Suisse was fined a total of $2.6 billion, but avoided even higher fines because it vowed to the Justice Department and a Senate panel that it had not only stopped the practice, but that it would close “‘any and all accounts of recalcitrant account holders.’”
“With a new Justice Department, there is hope that Credit Suisse will finally be held accountable,” the whistleblowers’ attorney told Bloomberg. “They could find Credit Suisse in violation of its plea agreement and seek additional penalties. They could bring new charges against the bank, and they may even be able to revoke or suspend its license to operate in the United States.”
The original charges against Credit Suisse were a result of a large-scale effort by U.S. authorities to crack down on the practice of wealthy Americans using Swiss banks to evade paying taxes. This effort stemmed from whistleblower disclosures made in 2007 by former UBS employee Bradley Birkenfeld. Birkenfeld provided the IRS with detailed information about how UBS was concealing taxable income of Americans through the use of secret offshore accounts. Birkenfeld’s disclosure led directly to $780 million dollars in civil fines and penalties paid by UBS and over $25 billion dollars in collections from U.S. taxpayers. U.S. authorities correspondingly began investigating a number of other Swiss banks, including Credit Suisse. Birkenfeld received a $104 million IRS whistleblower reward for his disclosures.
Through the IRS Whistleblower Program, qualified whistleblowers, individuals who voluntarily provide original information about tax fraud that leads to the collection of funds by the government, are entitled to an award of 15-30% of the funds recovered. In the 2020 fiscal year, whistleblower disclosures helped the IRS collect over $472 million from tax law violators, and the IRS issued over $86 million in awards to 169 whistleblowers.