Swiss Bank Involved in Tax Evasion Scheme Reaches Agreement with DOJ, Will Pay $10.7 Million
A Swiss-based private bank involved in a tax evasion scheme reached an agreement with the U.S. Department of Justice (DOJ) to pay $10.7 million and enter a non-protection agreement. In addition to paying the penalty LLB Verwaltung (Switzerland) AG, formerly known as “Liechtensteinische Landesbank (Schweiz) AG” (LLB-Switzerland), agreed to cooperate in any criminal or civil proceedings in return for the DOJ not to prosecute the company for tax-related criminal offenses.
The DOJ announced the agreement on August 5, 2019 and also issued a statement of facts agreed to by the parties. The statement of facts demonstrates that employees of LLB Verwaltung, including some members of management, worked with a Swiss assets manager to assist U.S. clients in avoiding tax authorities.
The Swiss asset manager provided prospective customers with a sales letter, pitching his ability to conceal a client’s assets and income from tax authorities. LLB-Switzerland knew that the Swiss asset manager was marketing tax evasion mechanisms to clients as the bank kept a copy of the manager’s sales letter in the bank’s files.
By 2008 the bank had 107 U.S. clients with over $176 million in assets. The bank’s management knew that many of the U.S. clients had undeclared funds in their accounts. While LLB-Switzerland monitored the U.S. investigation of Swiss bank UBS, initiated by former UBS banker Bradley Birkenfeld, it failed to take action to stop assisting U.S. taxpayers from evading taxes. LLB-Switzerland did not close the accounts of the Swiss assets manager until his indictment two years later.
In 2012, the U.S. Internal Revenue Service awarded Birkenfeld for exposing illegal Swiss bank accounts held by U.S. citizens. He received the largest whistleblower award ever given to an individual, $104 million. Birkenfeld was represented by whistleblower reward attorney Stephen M. Kohn.
Read the Department of Justice release: Justice Department Announces Resolution with LLB Verwaltung (Switzerland) AG.
Image courtesy of Gregory Varnum.