New investigations threaten – ex-employee blackens Credit Suisse for tax offenses

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A former employee claims that the major Swiss bank covers tax evaders even after the US fine. The case itself is from 2014 – but the tipster hopes that the new government will now take up the case.

The main building of Credit Suisse on Zurich's Paradeplatz, where the never-ending series of scandals causes hectic pace.

The main building of Credit Suisse on Zurich’s Paradeplatz, where the never-ending series of scandals causes hectic pace.

Photo: Urs Jaudas

In the middle of the affair for the Bankruptcy of the financial boutique Greensill An old scandal is boiling up again at Credit Suisse: A former bank employee has approached the US Department of Justice and the US tax authorities through a lawyer with the claim that the big bank would also have after theirs criminal settlement with the US authorities in May 2014 continued to help US customers hide funds.

Jeffrey Neiman, the lawyer for the former Credit Suisse employee, turned to various media outlets such as “Bloomberg” and the “New York Times”, which picked up the story.

The allegations themselves are not new; the ex-bank employee had already collected it in 2014. A tip from him later actually led to the US economics professor Dan Horsky being sentenced to seven months in prison for tax evasion in 2017.

Bank is taciturn

To date, it is not known whether the US judiciary is also investigating the big bank in this context. A bank spokesman simply said: “After our settlement in 2014, Credit Suisse has cooperated extensively with the US authorities and will continue to do so.”

“My client made it clear that the bank’s cooperation was a farce.”

Jeffrey Neiman, attorney for an ex-Credit Suisse employee

Why is the black money allegation boiling up again now of all times? The tipster’s attorney, Jeffrey Neiman, told the New York Times that his client was providing the authorities with additional information because a new government was now at the helm in Washington and he now hopes that it will take up the case.

“My client made it clear that the bank’s cooperation was a farce. The US Department of Justice and the IRS served over seven years (the U.S. tax agency, ed.) Information received that the bank continues to systematically help Americans hide undeclared accounts, ”wrote Jeffrey Neiman when asked by the newspaper. He didn’t give any details.

A threatening situation for the CS

Should the US judiciary actually take up the case, that would be the worst-case scenario for the big bank. The mere news of any new investigations in the USA would put the share price under new pressure.

“From the outside it is extremely difficult to assess whether this case could still have consequences for Credit Suisse,” says Andreas Venditti, an analyst at the private bank Vontobel. “If the whistleblower really has new facts, why is he only presenting them now?”

US customer imprisonment

In May 2014, Credit Suisse pleaded guilty to helping US clients hide their funds on a large scale. As part of this deal, she agreed to a fine of $ 2.6 billion. The US judiciary sent US attorney Neil Barofsky to the bank to oversee the implementation of the agreement. In autumn 2018 he cleared his desk. New misconducts were not known.

The former Credit Suisse employee had already approached the US authorities through his lawyer shortly after the agreement between the big bank and the US judiciary; that was in July 2014. To prove that the big bank was protecting other US tax evaders, he named a customer at the time: Dan Horsky, a retired economics professor who had at times amassed $ 200 million in investment deals and which he did with the help of banks kept hidden from the Treasury. The Israeli-American dual citizen was looked after by the Credit Suisse Israel desk at the time.

In 2015, Horsky pleaded guilty and, in turn, cooperated with the US authorities. In 2017 he was sentenced to seven months’ imprisonment and a fine of millions.

Five Credit Suisse bankers had to leave

According to a report in the “Wall Street Journal”, the US authorities knocked at the big bank at the end of 2015 in the course of the investigation against Horsky and made an appointment with chief lawyer Romeo Cerutti. The US investigators therefore had customers and processes around the Israel desk of the big bank in their sights. According to the report, the US judiciary ordered Cerutti not to do anything to avoid jeopardizing the investigation.

In 2016, the US authorities fully informed the big bank of the investigation. In the course of this, the big bank separated from five employees of the Israel desk, including a senior manager. As far as is known, the investigations at the time had no consequences for Credit Suisse itself.

Now the tipster claims through his lawyer that he can name other US clients who have hidden their funds via Credit Suisse. If he is right and the US judiciary actually imposes a new fine on the big bank, it could be worthwhile for the tipster. According to US law, whistleblowers receive up to 30 percent of the buses as a reward for their information.





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investigations threaten exemployee blackens Credit Suisse tax offenses

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