Hsbc Offshore Banking

Ex-Credit Suisse Offshore Banking Head Charged in US Tax Case

Credit Suisse Group AG (CSGN) ’s former head of North America offshore banking, Markus Walder, was among seven bankers charged with conspiring to help clients in the U.S. evade taxes through secret bank accounts.

The seven bankers and an eighth executive were charged yesterday in an amended indictment in federal court in Alexandria, Virginia . Four of the Credit Suisse bankers were previously charged. The new defendants include Walder, Susanne D. Ruegg Meier, a former Credit Suisse manager, and Andreas Bachmann, another former banker at the Zurich-based lender, Switzerland’s second largest.

The indictment increases pressure on Credit Suisse, which said July 15 that the Justice Department notified it that was a target of a criminal probe over former cross-border private banking services to U.S. customers. The U.S. is pursuing banks, bankers and advisers that encouraged American taxpayers to hide accounts from the Internal Revenue Services.

“Managers and bankers working in the cross-border business knew and should have known that they were aiding and abetting U.S. customers in evading their U.S. income taxes,” according to the indictment.

Walder, a Swiss resident, supervised teams of private bankers in Geneva and Zurich who worked in an unregistered private banking business in the U.S., and was a senior manager in a business registered with the U.S. Securities and Exchange Commission, according to the indictment.

Walder and others helped U.S. customers evade income tax through accounts not declared to the IRS, according to the indictment. In the fall of 2008, the bank maintained thousands of secret accounts for U.S. customers with as much as $3 billion in assets, according to a Justice Department statement.

The indictment traces how the bankers helped 35 American customers hide their funds in undeclared bank accounts. One of the accounts was opened in 1953 by a resident of Elizabeth, New Jersey, by an individual identified only as “customer 26.” That person died in 1998 and the account was taken over by another Credit Suisse customer, the indictment said.

“Credit Suisse is committed to a fully compliant cross- border business,” the bank said in a statement yesterday. “Subject to our Swiss legal obligations and throughout this process we will continue to cooperate with the U.S. authorities in an effort to resolve these matters.”

Those bankers already charged on Feb. 24 were Marco Parenti Adami, Emanuel Agustoni, Michele Bergantino and Roger Schaerer. They live in Europe and have not appeared yet in U.S. court.

HSBC Warns U.S. Clients with Offshore Accounts to Comply With U.S. ...

Last week, the IRS said it would give foreign financial institutions another six months to start complying with a new law to prevent offshore tax evasion by Americans.  HSBC’s former head of services for Indians living outside of India sent letters to Indian-American clients confirming that the IRS is seeking names of Americans who have accounts with the bank. He encouraged clients to consult with a U.S. tax advisor if they have concerns about reporting taxes to the IRS  relating to their HSBC India accounts.  The letter encouraged U.S. taxpayers to abide by U.S. tax laws regarding any offshore assets and implied that the bank intends to cooperate with the IRS investigation.

A number of banks recently found themselves under the scrutiny of U.S. authorities looking to track down assets hidden offshore.  On Tuesday, the private banking arm of HSBC announced that it will stop offering services to U.S. residents outside the United States to crack down on offshore tax evasion, which is increasingly becoming a burden in banking around the world.  Institutions now have until June 30, 2013, to reach agreements with the IRS on cooperation.

To read the full USA Today article, click here.

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Last week, the IRS said it would give foreign financial institutions another six months to start complying with a new law to prevent offshore tax evasion by Americans. HSBC’s former head of services for Indians living outside of India sent letters to Indian-American clients confirming that the IRS is seeking names of Americans who have accounts with the bank.

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