Basler Kantonalbank (BKB) has been fined $60m (£46m, €51m) as part of a deal with prosecutors pursuing it over tax evasion in the US.
In court, Basler Kantonalbank admitted that, between 2002 and 2012, it conspired with its employees, external asset managers, and clients to evade US tax and file false federal tax returns.
The $813.2m hidden was held in 1,144 accounts held by US citizens, many of whom were involved in the conspiracy.
Cash and carry
Much of wrongdoing occurred at BKB’s private bank when it operated in Zurich between 1997 and 2014.
BKB employees met directly with clients, but the bank primarily dealt with its undeclared US customers through external asset managers.
One external asset manager, with the knowledge of BKB management, would collect cash from clients in the US, fly it back and bank it as if it all happened in Zurich.
BKB continued to aggressively pursue US business even after a major competitor got cold feet.
Between July 2008 and March 2009, BKB accrued $441.6m in new assets by promoting Swiss bank secrecy, providing hold-mail services and assumed name and numbered accounts, and allowing accounts to be established through nominee entities set up in British Virgin Islands, Liechtenstein, and Panama.
The bank closed its cross-border services in 2011, when an employee admitted to carrying millions out of the US.
Aggressively pursue justice
“The era of hiding money overseas to evade US tax obligations is over,” said prosecutor Richard Zuckerman of the Justice Department’s tax division.
“Financial institutions, professionals, and account holders are on notice that the department continues to aggressively pursue these offences and will hold both individuals and entities accountable.”
The deal means BKB will cooperate fully, and “affirmatively disclose” data on US-related accounts, as well as disclose information on accounts closed between January 2009 and the end of 2017.
In return, prosecution against the bank for conspiracy will be deferred for an initial period of three years to allow BKB to demonstrate good conduct.
