A U.S. Senate subcommittee report due to be published on Wednesday alleges that Swiss bank Credit Suisse helped wealthy Americans hide billions of dollars of assets from the IRS and that the Department of Justice has done little to bring tax violators to task. The report also observed that despite huge budget cuts and national deficits, the DOJ did not work hard enough to make Credit Suisse release the names of almost 22, 000 U.S. customers.
Lawmakers alleged that for the past four years, federal prosecutors have been amply aware of the misconduct at Credit Suisse, where almost $12 billion in assets of wealthy Americans are supposed to be hidden. Despite indictment of seven bankers and a probe, until now, the Swiss bank has not been held legally accountable, and no one has faced trial over the issue.
However, DOJ spokeswoman Emily Pierce refuted the way the department was portrayed in the report and pointed out that the DOJ has charged 35 bankers and 73 account holders with offshore tax evasion offenses since 2009. It has also put pressure on Credit Suisse to find tax cheaters.
At a news conference on Tuesday, Sen. Carl M. Levin, chairman of the subcommittee on investigations, said the DOJ could have used grand jury subpoenas and civil summons to obtain the information required to prosecute tax violators. He said the DOJ should not depend upon the Swiss courts but use legal options available here.
Levin said, “Collecting taxes owed by tax evaders is vitally important for our fiscal situation. Beyond that, there is a basic question of fairness. These individuals are cheating not just the government but honest Americans who pay what they owe.”
The 175-page report alleges that from 2001 to 2008, Credit Suisse helped U.S. customers hide assets by opening accounts in the name of offshore shell entities. In many cases, Credit Suisse bankers helped U.S. clients avoid reporting by structuring large cash transactions in violation of U.S. law.
Sen. John McCain said at the conference, “Credit Suisse has greatly profited from an infamous business model … This organization must be held fully accountable for decades of ill-gotten profits.”