(Reuters) – The Swiss private banking unit of HSBC Holdings Plc will pay $192.4 million to resolve a U.S. probe of its role in helping wealthy Americans evade taxes by using undeclared Swiss bank accounts, the U.S. Department of Justice said on Tuesday.
FILE PHOTO: HSBC logo is seen on a branch bank in the financial district in New York, U.S., August 7, 2019. REUTERS/Brendan McDermid
The DoJ’s deal with HSBC Private Bank (Suisse) SA is the latest in which numerous Swiss-based banks, including UBS and Credit Suisse Group, have paid billions of dollars in settlements and penalties for conspiring to help rich Americans dodge taxes. [tinyurl.com/vmeuabw]
The hard line taken by U.S. authorities over the last decade has helped pressure Switzerland to end banking secrecy that long allowed offshore clients to stash money in accounts in the republic. The Swiss government has deals with many countries to exchange information about accounts held by foreigners. [tinyurl.com/y445cx7p]
In this latest case, the DoJ filed a charge of conspiracy to defraud the United States against HSBC Private Bank (Suisse) but agreed to drop it in three years if the bank abides by the deal’s terms, court documents show.
The charge relates to HSBC Private Bank (Suisse)’s conduct between 2000 and 2010, when the DoJ said the Geneva-based bank assisted U.S. clients in hiding offshore assets and income. Its bankers traveled to cities, including Miami, to scout for clients, the department said.
Even as the DoJ began investigating Swiss banks, including UBS, around 2008 for tax-dodging schemes, prosecutors said some HSBC Private Bank bankers continued the cross-border business with U.S. residents.
“Some HSBC Switzerland bankers assisted clients in closing their accounts in a manner that continued to conceal their offshore assets,” U.S. prosecutors said in a statement.
UBS agreed to pay $780 million in fines, penalties, interest and restitution in 2009 for helping Americans hide their assets from U.S. tax authorities. In 2014, Credit Suisse paid $2.6 billion.
Many other Swiss banks have followed suit, including HSBC Private Bank, which said it cooperated with U.S. authorities, swapped out bankers and changed how it does business.
“Today the Swiss subsidiary operates under new management,” Chief Executive Alex Classen said in a statement. “We have strengthened our compliance function, enhanced our control framework and put in place a comprehensive client tax transparency policy.”
In 2017, HSBC paid 300 million euros ($330.6 million)to settle a separate investigation on tax evasion by French citizens via its Swiss private bank after an ex-employee leaked client data that spawned investigations in several countries.
Reporting by John Miller; Additonal reporting by Bharath Manjesh in Bengaluru; Editing by Shailesh Kuber and Dan Grebler