The consequences of misconduct at the now-defunct Swiss bank Credit Suisse continue to escalate.
On Monday, federal prosecutors announced that UBS, which acquired Credit Suisse after its near collapse two years ago, would pay a $510 million fine linked to Credit Suisse’s involvement in helping clients evade taxes.
Authorities revealed that Credit Suisse assisted clients in concealing over $4 billion from the U.S. Internal Revenue Service across at least 475 undeclared accounts. The bank’s Singapore branch was notably implicated for maintaining offshore accounts for taxpayers who had not reported their tax liabilities.
Credit Suisse admitted guilt in enabling U.S. customers to avoid their tax responsibilities by opening and managing undisclosed offshore accounts and providing private banking services designed to hide assets and income from tax authorities.
Prosecutors further stated that Credit Suisse bankers falsified documents, processed sham donations, and managed more than $1 billion in accounts without adequate efforts to comply with tax regulations.
Following the 2023 merger with Credit Suisse, UBS reported suspicious activities to regulators and had proactively set aside funds anticipating the penalty, according to a statement from the bank.
The Department of Justice investigation spanned several years, with prosecutors indicating that the bank has committed to cooperating with ongoing inquiries.
UBS emphasized that it was not involved in the original misconduct and maintains a strict policy against tax evasion, describing this issue as part of Credit Suisse’s legacy challenges.
Credit Suisse’s rapid downfall two years ago followed a series of scandals, legal challenges, and leadership upheavals. The bank suffered a $5.5 billion loss tied to the collapse of Archegos Capital Management, a once-prominent investment fund.
UBS incurred nearly $400 million in regulatory fines related to these prior disturbances.
Under pressure from Swiss regulators, UBS stepped in to acquire Credit Suisse for $3.2 billion in 2023.
