Bank Admits to Helping U.S. Taxpayer-Clients Hide Hundreds of Millions of Dollars in Offshore Accoun

https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-criminal-charges-against-z-rcher-kantonalbank

Department of Justice
U.S. Attorney’s Office
Southern District of New Yo

FOR IMMEDIATE RELEASE
Monday, August 13, 2018

Manhattan U.S. Attorney Announces Criminal Charges Against Zürcher Kantonalbank Of Switzerland, With Deferred Prosecution Agreement Requiring Payment Of $98.5 Million, As Well As Guilty Pleas Of Two Zürcher Kantonalbank Bankers

Bank Admits to Helping U.S. Taxpayer-Clients Hide Hundreds of Millions of Dollars in Offshore Accounts

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Richard E. Zuckerman, the Principal Deputy Assistant Attorney General for the Tax Division of the Department of Justice, and Don Fort, Chief, Internal Revenue Service-Criminal Investigation (“IRS-CI”), announced the filing of criminal charges against ZÜRCHER KANTONALBANK (“ZKB”), a financial institution headquartered in Zurich, Switzerland. ZKB is charged with conspiring to help U.S. taxpayer-clients evade their U.S. tax obligations, file false federal tax returns, and otherwise hide hundreds of millions of dollars in offshore bank accounts held at ZKB.

Mr. Berman also announced a deferred prosecution agreement with ZKB (the “Agreement”), under which ZKB admitted to its unlawful conduct in assisting U.S. taxpayer-clients in violating their legal duties. The admissions are contained in a detailed Statement of Facts attached to the Agreement. The Agreement requires ZKB to pay a total of $98.5 million. The $98.5 million figure reflects, in part, a credit given to ZKB because of its cooperation in this case. However, the amount of ZKB’s cooperation credit was reduced by the Government due to ZKB’s actions, as described in the Statement of Facts, in dissuading two indicted ZKB bankers from cooperating with U.S. authorities for years after their indictment. Those indicted bankers, STEPHAN FELLMANN and CHRISTOF REIST, also pled guilty today.

The criminal charge against ZKB is contained in an Information (the “Information”) alleging one count of conspiracy to willfully and knowingly (1) defraud the IRS, (2) file false federal income tax returns, and (3) evade federal income taxes. If ZKB abides by all of the terms of the Agreement, the Government will defer prosecution on the Information for three years and then seek to dismiss the charges.
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From at least in or about 2002 through in or about 2009, ZKB helped certain U.S. taxpayers with accounts at ZKB evade their U.S. tax obligations, file false federal tax returns with the IRS, and otherwise hide accounts held at ZKB from the IRS (hereinafter, “undeclared accounts”). ZKB did so by opening and maintaining undeclared accounts for U.S. taxpayers at ZKB, and by allowing third-party asset managers to open undeclared accounts for U.S. taxpayers at ZKB. ZKB held approximately 2,000 undeclared accounts on behalf of U.S. taxpayer-clients, who collectively evaded over $39 million in U.S. taxes, between 2002 and 2013.
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