Swiss Bank Banque Pictet Admits to Conspiring With US Taxpayers to Hide Over $5.6 Billion From IRS
By Jace Dela Cruz
Dec 05, 2023 12:57 AM EST
Dec 05, 2023 12:57 AM EST
Swiss bank Banque Pictet has acknowledged its involvement in a conspiracy with US taxpayers to conceal over $5.6 billion from the Internal Revenue Service (IRS), the Department of Justice (DOJ) disclosed on Monday.
The private banking arm of the Pictet Group, established 218 years ago, has agreed to pay approximately $122.9 million in restitution and penalties under a Deferred Prosecution Agreement (DPA) reached with prosecutors.
Banque Pictet managed 1,637 accounts for American clients, facilitating the evasion of approximately $50.6 million in US taxes collectively between 2008 and 2014. The resolution comes as part of the DOJ's broader investigations into offshore US tax evasion by foreign banks since 2008.
Acting Deputy Assistant Attorney General Stuart M. Goldberg highlighted Banque Pictet's active role in assisting US taxpayers in concealing income through coded accounts and other deceptive means.
The bank is set to pay nearly $122.9 million, covering restitution, disgorgement of fees, and a financial penalty. Additionally, Banque Pictet must cooperate fully with investigations related to these secret accounts.
"This case should provide a clear message to others who try to hide their assets and income offshore," IRS-CI Chief Jim Lee said in a statement.
If the bank complies with the deal's terms, CNBC reported that the Justice Department will defer prosecution for three years and then junk a charge of criminal conspiracy to defraud the IRS.
According to court documents, the Pictet Group, founded in 1805, operated as a privately held Swiss financial institution with a significant presence in Switzerland, Luxembourg, Hong Kong, Singapore, and the Bahamas.
The private banking division, managing approximately $165 billion in assets under management (AUM) as of December 31, 2014, was implicated in assisting US taxpayer clients in evading their tax obligations from 2008 to 2014.
Banque Pictet allegedly utilized various means to aid US taxpayer clients in concealing their undeclared accounts, including forming offshore entities, maintaining accounts in the names of offshore entities, and facilitating the transfer of funds through fictitious donations, according to the DOJ.
The bank's actions resulted in holding 1,637 US Penalty Accounts with an aggregate maximum AUM of approximately $5.6 billion.
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