HSBC Holdings Plc’s Swiss unit to pay $192 million in U.S. tax dodging case: DoJ

In a statement the U.S. Department of Justice stated, the Swiss private banking unit of HSBC Holdings Plc will be paying $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 DoJ’s deal with HSBC Private Bank (Suisse) SA is the latest settlement in a series of Swiss-based banks settlements, which includes the Credit Suisse Group and UBS, who have agreed to pay billions of dollars in penalties and settlements for conspiring to help rich Americans evade taxes.

The tough stand taken by U.S. authorities over the last decade has added pressure on Switzerland to end its banking secrecy laws that allowed offshore clients to stash money in accounts in the country.

In this particular case, according to court documents, the DoJ had 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.

The charges relate to HSBC Private Bank (Suisse)’s conduct between 2000 and 2010, during which the bank had helped U.S. clients hide their offshore assets and income from U.S. authorities.

In its statement, the DoJ said its bankers had traveled to cities, including Miami, to scout for clients.

Around 2008, despite continuing pressure by the DoJ on Swiss banks, including UBS, a few HSBC Private Bank bankers continued to help their U.S. clients hide their taxes from the U.S. government.

“Some HSBC Switzerland bankers assisted clients in closing their accounts in a manner that continued to conceal their offshore assets,” said U.S. prosecutors in a statement.

In 2009, UBS had agreed to pay $780 million in fines, penalties, interest and restitution for helping Americans hide their assets from U.S. tax authorities.

In 2014, Credit Suisse paid $2.6 billion.

In the following years, other Swiss banks have followed suit, including HSBC Private Bank with many of them cooperating with U.S. authorities.

“Today the Swiss subsidiary operates under new management,” said 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.”



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