Swiss Bank Credit Suisse pleaded
guilty on Monday to federal charges that it illegally allowed some U.S. clients
evade their taxes.
The guilty plea settles a long-running probe by the Justice
Department.
Attorney General Eric Holder said the bank "engaged in an
extensive and wide- ranging conspiracy to help U.S. taxpayers evade
taxes."
The Justice Department said that Credit Suisse, for a period of time spanning
decades and continuing through 2009, "operated an illegal cross-border
banking business" to help thousands of banking clients conceal their
income from the IRS.
The bank will pay a total of $2.6 billion to the federal government and
New York financial regulators as part of the settlement. Holder said Credit
Suisse has also "fundamentally changed" its business practices.
Officials hailed the guilty plea a major milestone -- the first such
plea by a bank in decades.
But missing is any agreement by Credit Suisse to provide names of the
U.S. clients who allegedly used the bank to hide money from the IRS.
In 2009, Swiss bank UBS settled similar charges and paid $780 million,
while also agreeing to provide names of thousands of customers.
For years, prosecutors
shied away from charging banks with crimes because of fear that they could
lose their charters and go out of business.
However, as part of the Credit Suisse guilty plea agreement, U.S.
banking regulators have agreed not to try to pull the bank's license to do
business in the United States.
In a statement, Credit
Suisse CEO Brady Dougan said the bank "deeply regret(s) the past
misconduct that led to this settlement."
The Justice Department has been criticized for its inability to bring
major prosecutions related to the global
financial crisis, and the shoddy banking practices that nearly sank several
major banks. The Credit Suisse deal will likely do little to quiet that
criticism, as the conduct involved is not related to the financial crisis.
Credit Suisse bankers used novel ways to help clients hide money in
offshore accounts. The bank allegedly opened a branch at the Zurich airport,
equipped with a special elevator to whisk clients to private banking suites.
The arrangement allowed customers to do their banking quickly before hitting
the Alpine ski slopes.
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