Even after promising to end the practice ten years ago, UBS Group AG agreed to pay $511 million to resolve a US inquiry into how Credit Suisse Group, the Swiss bank it acquired, assisted wealthy Americans in avoiding taxes.
According to the Justice Department, a Credit Suisse division entered a guilty plea to conspiring to assist its clients in concealing more than $4 billion from the IRS in at least 475 offshore accounts.
Additionally, the US filed a criminal prosecution against US accounts booked at Credit Suisse AG Singapore; if the bank cooperates enough, the charge would be dropped.
The settlement puts an end to a protracted scandal involving Credit Suisse, which for decades assisted Americans in hiding money from the IRS by abusing Swiss bank secrecy regulations.
Credit Suisse assisted US taxpayers in opening and maintaining accounts they failed to disclose to the IRS, concealing their assets and income, even after entering into an agreement in 2014 promising to end the practice.
The court documents, which did not identify the billionaire scion of a wealthy European family, claimed that Credit Suisse illegally assisted clients in hiding assets.
The bank claimed that despite having the "highest obligation" to learn as much as possible about him given his assets, Credit Suisse neglected to inquire about his status, categorize him as a US taxpayer, or terminate his account.
The agreement requires UBS to keep working with the US, which might lead to prosecution of additional clients.
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Additionally, the Zurich-based bank stated that it anticipates UBS AG will report a charge related to the deal in the second quarter.