14/08/18

Switzerland's ZKB to pay $98 million to end U.S. probe of tax evasion

(Reuters) -- Assistant U.S. Attorney Sarah Paul said at the hearing before U.S. District Judge Paul Oetken in Manhattan that her office would not pursue charges against the bank under a deferred prosecution agreement. Lawyers for ZKB declined to comment after the hearing.

Two bankers at ZKB, Stephan Fellmann and Christof Reist, also pleaded guilty on Monday to a single misdemeanor conspiracy charge, which carries a maximum prison sentence of one year. The two were originally indicted on a more serious felony charge in 2012.

 “On behalf of Mr. Fellmann and Mr. Reist, we are grateful that the Department of Justice kept an open mind about this case and acted with fairness in dismissing the felony charges against our clients,” Jim Walden, a lawyer for Fellmann, and Sean Casey, a lawyer for Reist, said in a joint statement. “A misdemeanor offense was appropriate for the conduct of both individuals.”

Fellmann and Reist both admitted at the hearing that they provided services to American clients while they “deliberately avoided learning” that the clients were using their accounts to avoid paying U.S. taxes.

The case emerged from a U.S. crackdown on offshore tax evasion by wealthy Americans utilizing undeclared Swiss bank accounts. Fellmann, 53, and Reist, 60, came to the United States voluntarily to face the charges in 2016.

In a 2012 indictment, prosecutors said that from 2003 to 2009, more than 190 U.S. taxpayer clients of ZKB conspired to conceal accounts at the bank from the U.S. Internal Revenue Service to evade taxes.

Prosecutors said that both men helped clients open and maintain undeclared accounts using codenames or in the names of sham entities and ensured that mail relating to the accounts was not sent to their American clients in the United States.

The U.S. crackdown has resulted in several recent settlements, including a $5 million deal last month with NPB Neue Bank.