Julius Baer to Pay $547 Million Under Guilty Plea in U.S. Tax Case -- 2nd Update
05 February 2016 - 2:45PM
Dow Jones News
By Maria Armental
Swiss bank Julius Baer Group AG on Thursday admitted to helping
U.S. taxpayers hide billions of dollars in offshore accounts and
agreed to pay $547 million.
Separately, two of the bank's former client advisers--Daniela
Casadei and Fabio Frazezetto--pleaded guilty to conspiring to help
clients evade taxes in the U.S. The Swiss residents, initially
charged in 2011, surrendered to U.S. authorities this week.
Ms. Casadei, 52 years old, and Mr. Frazzetto, 42, are scheduled
to be sentenced on Aug. 12.
Julius Baer, which the authorities say at its high had about
$4.7 billion under management related to more than 2,500 undeclared
accounts from U.S. taxpayers, is one of about a dozen Swiss banks
that have come under U.S. Justice Department investigation for
allegedly providing Americans with undeclared accounts that were
shielded by Switzerland's bank secrecy laws.
In 2014, Credit Suisse Group AG pleaded guilty to tax evasion
conspiracy and agreed to pay $2.6 billion.
On Monday, Julius Baer Chief Executive Boris Collardi
acknowledged at a news conference that it had dismissed a worker
shortly after the corruption scandal at FIFA, soccer's global
governing body, broke last year. The bank, mentioned in an
indictment of FIFA officials for alleged racketeering and money
laundering conspiracies, is cooperating with the authorities, Mr.
Boris said.
Under the agreement, filed in Manhattan federal court, the Swiss
bank agreed to pay the $547 million by Feb. 9 and admitted to
having conspired to defraud the IRS, file false federal income tax
returns and evade federal income taxes.
The bank had disclosed the potential settlement in December.
In return, the government agreed to defer prosecution for three
years and requested the charges be dismissed after that time if the
bank complies with all requirements.
"Julius Baer not only turned a blind eye to tax avoiders, but
actually conspired with them to break the law," U.S. Attorney Preet
Bharara said in a statement.
According to court documents, the bank circulated an internal
memo, titled "U.S. Clients Do's & Don'ts," giving client
advisers suggestions on what to do and say while in the U.S. to
avoid scrutiny. For example, it told employees to respond to
questions from immigration officials focusing on the "fun time"
part of their trip and to use calling cards, preferably bought in
cash, to talk with clients while in the U.S.
However, the authorities said the bank had begun to change its
policies, such as requiring U.S. tax forms when opening new
accounts, before learning it was under investigation.
As reported previously by The Wall Street Journal, Julius Baer's
board of directors decided in 2009 to disclose the bank's issues
with undeclared U.S. accounts to the Justice Department. However,
the bank was prevented from doing so by Switzerland's financial
regulator, Finma, "in order not to prejudice the Swiss government
in any bilateral negotiations with the U.S. government on
tax-related matters," according to a statement of facts filed on
Thursday.
John Letzing contributed to this article.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
February 04, 2016 22:30 ET (03:30 GMT)
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