Credit Suisse Group AG is close to resolving a U.S. tax-evasion probe with an agreement that might include a penalty of more than $1 billion that may also include a guilty plea, according to Bloomberg News.
Scott Michel, a tax lawyer at Caplin & Drysdale in Washington said that according to Bloomberg News, the Justice Department, cracking down on foreign banks that help Americans cheat the Internal Revenue Service, may charge the unit instead of the whole firm.
“The U.S. wants Credit Suisse to pay money, acknowledge wrongdoing and accept responsibility, and take certain steps to ensure that similar conduct doesn’t occur in the future,” Scott Michel said. “They’ll want Credit Suisse to cooperate in any investigation by the Justice Department and IRS of any clients and of its own bankers and management.”
“It has the earmarks of a structural step that somebody has thought of to try to protect the bank as a whole in the event that a guilty plea is required,” Scott Michel said. “I’ve had a couple of criminal tax cases over the years where the client created a corporate entity to enter a guilty plea.”
According to Bloomberg News, a spokesman for Zurich-based Credit Suisse declined to comment on the talks with U.S. authorities and would not elaborate on the new unit beyond what is disclosed in the official records.
U.S. Attorney General Eric Holder reported that the Justice Department is readying criminal cases against banks that show financial institutions are not too big to prosecute.
“I intend to reaffirm the principle that no individual or entity that does harm to our economy is ever above the law,” he said, without identifying firms that may be charged.
The Wall Street Journal reported that a settlement may exceed $1 billion. It may go as high as $1.6 billion, Reuters wrote, citing an unidentified person familiar with the matter.
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