How Credit Suisse Helped U.S. Clients Evade Taxes

From secret elevators to meetings at golf clubs, a new report unveils ''cloak and dagger" techniques

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Credit Suisse used elaborate measures to help thousands of wealthy clients avoid billions of dollars in American taxes, a new report by a US congressional committee alleged.

The Swiss banking giant reportedly adopted measures that included taking clients to meetings in Zurich on remote-controlled, button-less elevators; handing the customer bank statements hidden in a Sports Illustrated magazine during breakfast at the Mandarin Oriental Hotel in New York; and meeting clients at bank-sponsored events, including the annual “Swiss Ball” in New York and golf tournaments in Florida.

The report alleges Swiss bankers made 150 separate trips between 2001 and 2008 to the United States to meet clients and to solicit new business.

Credit Suisse also encouraged U.S. customers to travel to Switzerland, the report said, by providing them with a branch office at the Zurich airport that would offer a wide-ranging set of banking services. Nearly 10,000 U.S. customers availed themselves of that office. Once in Switzerland, clients were advised on how to engage in activities without creating a paper trail that could betray the secrecy of their Swiss accounts.

The Senate report, based on a two-year investigation, maintained that Credit Suisse had “had over 22,000 U.S. customers with Swiss accounts whose assets, at their peak, exceeded 12 billion Swiss francs,” or about $13.4 billion dollars.

The investigation found that the vast majority of the accounts were undeclared. To date, due to Swiss Government restrictions, the United States has obtained the names of only about 230 U.S. clients with hidden accounts at Credit Suisse, the report said.

Credit Suisse CEO Brady Dougan expressed regret about the bank’s conduct.

“Credit Suisse’s management team regrets very deeply that despite the industry-leading compliance measures we put in place, we had some Swiss-based private bankers who appear to have violated U.S. law.” said Dougan during his opening testimony for Wednesday’s hearing by the Senate Permanent Subcommittee on Investigations.

The U.S. Department of Justice is investigating 14 other Swiss banks for facilitating tax evasion, the report also said.