As part of an agreement with the US Department of Justice, Swiss-headquartered Pictet has admitted to helping clients evade taxes owed to the Internal Revenue Service and will pay a penalty.
The US authorities have filed criminal charges against Pictet for helping clients avoid taxes from 2008 to 2014, according to a statement by the Department of Justice (DOJ).
As part of the resolution, the Swiss bank has entered a «Deferred Prosecution Agreement» (DPA) and agreed to pay over $122.9 million to the US Treasury. The payment includes gross fees earned, unpaid taxes and a penalty.
Clear Message
«This case should provide a clear message to others who try to hide their assets and income offshore,» said Jim Lee, chief of the Internal Revenue Service, Criminal Investigation (IRS-CI). «Our special agents are experts in following the money, and they are the best at uncovering schemes that try to defraud the US tax system. Offshore tax evasion is a priority for [IRS-CI].»
According to the DOJ statement, Pictet held 1,637 secret bank accounts that held more than $5.6 billion of assets in January 2008 on behalf of US clients who collectively evaded approximately $50.6 million in taxes.
Tax Evasion Methods
Pictet used various means to «assist US taxpayer-clients in concealing their undeclared accounts» either directly or through external asset managers. This was done first through its estate planning and trust services unit and later through a wholly-owned subsidiary called Rhone Trust and Fiduciary Services SA (Rhone).
The bank provided services that help hold account-related mail at the bank rather than have it sent to the client. It also accepted tax forms that «the group knew or should have known falsely stated or implied under penalty of perjury» that offshore entities beneficially owned the assets in the undeclared accounts.
Continued Cooperation
In addition to the payment, Pictet agreed under the DPA to accept responsibility for its conduct, refrain from future criminal conduct, implement remedial measures and «cooperate fully with further investigations into hidden bank accounts». In exchange, the US has agreed to defer prosecution for three years and seek to dismiss the charge thereafter.
«Specifically, the bank is required to cooperate fully with ongoing investigations and affirmatively disclose any information it may later uncover regarding US-related accounts,» the statement explained.
No Protection
«The bank is also required to disclose information consistent with the Justice Department’s 'Swiss Bank Program' relating to accounts closed between 1 January 2008, and 31 December 2022. The agreements provide no protection from criminal or civil prosecution for any individuals.»
