Daniela Casadei and Fabio Frazzetto, former Julius Baer client advisers, pleaded guilty to conspiracy charges in Manhattan federal court on Thursday, while a US judge approved a deferred prosecution agreement with the bank.
The proceedings followed a long-running investigation into Switzerland’s third-largest bank that stemmed from a US crackdown on offshore tax evasion by wealthy Americans utilising undeclared Swiss bank accounts.
Resolution reached
“This settlement is the result of Julius Baer’s proactive and long-standing cooperation with the DOJ’s investigation. The two Julius Baer employees indicted in this context in 2011 have also taken an important step towards a resolution of their cases,” the bank said in a statement.
Under the agreement, Switzerland’s third largest bank agreed to pay the $547m (£378m, €491m) by 9 February and admitted to having conspired to hide up to $4.7bn in assets from the Internal Revenue Service, file false federal income tax returns and evade federal income taxes.
Julius Baer’s chief executive Boris Collardi added: “Being able to close this regrettable legacy issue is an important milestone for Julius Baer. The settlement ends a long period of uncertainty for us and all our stakeholders.”
The 125-year old bank had already taken provisions in June and December 2015, totalling this amount, and booked them to its 2015 results.
US tax evasion
Julius Baer was one of a large group of banks investigated by the DoJ in 2011 for aiding tax evasion by American clients.
Credit Suisse and UBS paid fines of $2.6bn and $780m to settle their respective investigations. Many smaller Swiss banks have avoided prosecution by voluntarily disclosing their wrongdoing as part of a separate DoJ programme, where total penalties stand at about $1.4bn.
Banks still under investigation by the DoJ include the Swiss unit of HSBC, Europe’s biggest lender.
Julius Baer’s total client assets amounted to CHF385bn at the end of 2015, including CHF300bn of assets under management.
