FULL TEXT Credit Suisse Criminal Case

May 20, 2014

Credit Suisse AG, a Swiss corporation, operates a global financial services business in more than 50 countries with over 45.000 employees, including 9.000 U.S. employees. In the United States, Credit Suisse operates as a Financial Holding Company regulated by the Federal Reserve, and offers private banking and wealth management services to over two million clients, focusing on ultra-high-net-worth and high-net-worth individual clients around the globe.

On Feb. 23, 2011, former Credit Suisse employees: Marco Parenti Adami, Emanuel Agustino,Michele Bergantino, and Roger Schaerer were indicted by a federal grand jury in the Eastern District of Virginia ("EDVA") with conspiring with other Swiss bankers and U.S. taxpayers to defraud the United States.  

On July 21, 2011, the EDVA grand jury returned a superseding indictment charging conspiracy to defraud the United States against  former Credit Suisse employees: Markus Walder, Süsanne D. Rüegg Meier, Andreas Bachmann,and Josef Dörig.  

To date, the Department of Justice ("DOJ") has received  guilty pleas from Defendants Bachmann on March 12, 2014; and Dörig on April 30, 2014,   and they each face maximum penalties of five years in prison. The other Defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

On May 19, 2014, Credit Suisse entered into a plea agreement with DOJ whereby it acknowledged that, for decades prior to and through 2009, it operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and concealing their offshore assets and income from the IRS. Earlier this year, Credit Suisse paid about $196 million in disgorgement, interest and penalties to the Securities and Exchange Commission (SEC) for violating the federal securities laws by providing cross-border brokerage and investment advisory services to U.S. clients without first registering with the SEC, and that settlement is reflected in the current plea agreement. Pursuant to the agreement, Credit Suisse will pay:
  • $1.8 billion to the Department of Justice for the U.S. Treasury, 
  • $100 million to the Federal Reserve, and 
  • $715 million to the New York State Department of Financial Services.  
In making its plea, Credit Suisse acknowledged to concealing the undeclared accounts by:
  • assisting clients in using sham entities to hide undeclared accounts;
  • soliciting IRS forms that falsely stated, under penalties of perjury, that the sham entities were the beneficial owners of the assets in the accounts;
  • failing to maintain in the United States records related to the accounts;
  • destroying account records sent to the United States for client review;
  • using Credit Suisse managers and employees as unregistered investment advisors on undeclared accounts;
  • facilitating withdrawals of funds from the undeclared accounts by either providing hand-delivered cash in the United States or using Credit Suisse's correspondent bank accounts in the United States;
  • structuring transfers of funds to evade currency transaction reporting requirements; and
  • providing offshore credit and debit cards to repatriate funds in the undeclared accounts.
Concurrent with the announced criminal plea agreement, the Board of Governors of the Federal Reserve System reached a resolution with Credit Suisse, by which Credit Suisse has agreed to a cease and desist order, certain remedial steps to ensure its compliance with U.S. law in its ongoing operations, and a civil monetary penalty of $100 million.  Additionally, the New York State Department of Financial Services is announcing a similar resolution by which Credit Suisse has agreed to a cease and desist order and a monetary penalty of $715 million.

READ FULL-TEXT Source Documents: