The Department of Justice today announced that Finter Bank Zurich has reached a resolution under the Department’s Swiss Bank Program, which provides a means for Swiss banks to resolve potential criminal liabilities in the United States. Finter will pay a $5.4 million penalty in return for a non-prosecution agreement for tax-related criminal offenses.
To be eligible to enter the program, which was established in 2013, Swiss banks were required to advise the Justice Department by Dec. 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared U.S.-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.
Under the program, banks are eligible to enter into a NPA if they:
Make a complete disclosure of their cross-border activities;
Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
Cooperate in treaty requests for account information;
Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and
Pay appropriate penalties.
According to the terms of the NPA, Finter agrees to cooperate in any related criminal or civil proceedings and demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts.
Since 2008, Finter has maintained 283 U.S.-related accounts with an aggregate maximum balance of approximately $235 million.
Since its establishment and continuing through at least 2011, Finter—through its managers, employees and others—aided and assisted U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the Internal Revenue Service. After 2008, when Swiss bank UBS AG publicly announced that it was the target of a criminal investigation by U.S. tax authorities, Finter accepted accounts from U.S. persons exiting other Swiss banks.
“Finter provided services that allowed U.S. clients to eliminate the paper trail associated with the undeclared assets and income, including ‘hold mail’ services and numbered and coded accounts,” the Justice Department stated. “In addition, Finter assisted clients in using sham entities as nominee beneficial owners of undeclared accounts, solicited Forms W-8BEN that falsely stated under penalties of perjury that the sham entities beneficially owned the assets in the undeclared accounts, and provided cash cards and credits cards linked to the undeclared accounts.”