Credit Suisse whistleblowers say Swiss bank has been helping wealthy Americans dodge U.S. taxes

[BumRushDaShow]

Source: CNBC

Credit Suisse, the failed Swiss bank taken over by UBS Group AG in a hastily arranged bailout earlier this month, may bring with it a fresh set of regulatory and legal problems for its new owner.

For years, the private bank has provided a safe haven for wealthy American clients to hide assets from the IRS — even after it was caught and prosecuted for doing the same thing more than a decade ago, according two former Credit Suisse bankers who spoke in exclusive interviews with CNBC and are working with the U.S. government as whistleblowers.

The bank notoriously pleaded guilty in 2014 to criminal charges for “knowingly and willfully” helping thousands of U.S. clients conceal their offshore assets and income from the IRS. It admitted at the time that it used sham entities, destroyed account records and hand delivered cash to American clients to avert IRS detection — agreeing to crack down on U.S. tax dodgers going forward as part of its plea deal. Credit Suisse also agreed at the time to a host of reforms, including disclosing its cross-border activities and cooperating with authorities when they request information, among other things.

The now troubled bank appears to have violated that agreement, according to a new report by the Senate Finance Committee that details ongoing and rampant abuse since then. The report, released Wednesday, details the findings of the panel’s two-year investigation and takes on more urgency given the looming banking crisis. The Swiss National Bank injected more than $100 billion of liquidity into Credit Suisse to keep it afloat earlier this month, while the Swiss government agreed to provide UBS with some $9 billion to backstop losses resulting from the takeover.

Read more: https://www.cnbc.com/2023/03/29/credit-suisse-whistleblowers-say-bank-has-been-helping-americans-dodge-us-taxes.html

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Full headline: Credit Suisse whistleblowers say Swiss bank has been helping wealthy Americans dodge U.S. taxes for years

I know a lot of this first came out with the publication of the Panama Papers and even after that, they apparently kept right on doing it.

[Old Crank]

1. Time to take the hidden assets

And then 100% fine plus interest.
And jail.

[BumRushDaShow]

2. The irony of all of this

is that the Panama Papers were published in 2016 and then look what happened with the 2016 election.

[KS Toronado]

12. Did FO卐 report on it accurately

at the time or was it more fake news/witch hunt they gave their viewers? Seems like MSM could have spent more
time on it also. But then again did oligarchs want their reporters reporting on their hidden money?

[LittleGirl]

3. I live here and didn't bank with Credit Suisse

But every year, we file our taxes with the IRS because of the American laws.

Trying to get a bank account in this country as Americans was a freaking nightmare. The first bank, Post Finance froze our account for three weeks! We couldn’t get groceries without using a U.S. credit card because we had no access to our money.

The news that whistleblowers gave isn’t news. It’s how the Swiss treat Americans because they don’t want to report to the IRS what is in the local accounts. The fact they hide those account totals to the IRS is no surprise. Because if you’re rich, you can get away with money laundering etc because you’re rich.

It’s a clusterf*ck.

[BlueMTexpat]

8. When I arrived in Switzerland

nearly three decades ago, I was easily able to open an account with the Swiss Bank Corporation (SBC) because I was an "international civil servant" (ICS) to whom special banking laws applied. In 1998, SBC merged with the Union Bank of Switzerland and is now part of today's UBS.

I have remained a client since then and UBS also holds the mortgage on my apartment here. When I had to refinance in 2021, they gave me an excellent interest rate because I have been a longtime client. They have always treated me fairly. I can only speak to my own experience.

After the IRS really put the screws on the Swiss banks for derelict US citizens - a lesson that Crédit Suisse didn't seem to learn - UBS has scrupulously reported my own account holdings to the IRS. In addition, I must file an annual Foreign Bank Accounts Report (FBAR) separately from my regular income taxes for the IRS.

Because my foreign financial assets are well below the IRS reporting threshhold, I do NOT have to file Form 8938, thank heavens. But many US citizens or dual US nationals who live here must do so. They REALLY hate that requirement.

As a legal US citizen retiree resident in Switzerland, I must file BOTH US and Swiss tax returns. For me, it is not really double taxation because the Swiss don't charge me taxes on my US SSI, pension or IRA income as the IRS taxes me on those. When I received a salary here while working for international organizations, I also had to report that to the IRS but my ICS status granted me special treatment by both countries; there was no reporting requirement at all for Switzerland then.

For some time after my official retirement, I worked as a consultant for international organizations and then as an adjunct professor at a local university. I had to report that income to both taxing authorities and my ICS status no longer applied. But because it was presumed that Switzerland would tax me on that income, there was an IRS exemption for a certain amount of foreign earned income and that also could be offset by expenses and Swiss taxes here.

I am not sure to what extent those rules apply now because of the Trump tax cuts. I have received no salary or fee income here since 2015 so I've no longer had to comply with that requirement.

But the Swiss wealth tax applies to the VALUE of all real estate and financial assets I hold in BOTH countries - IRA value excepted - as of 31 December of each year. It's not a huge bite because my asset values are fairly modest. But it is an extra tax payment that I accept because I LOVE living here.

As you say, it is almost impossible for expat Americans without some sort of "in" - usually through their employers - to get a local bank account here. The cantonal banks will not even accept dual national Swiss-Americans as clients since the banking crisis in 2008 because they absolutely refuse to report to the IRS. Some dual national Swiss-Americans I know even gave up their US citizenship so that they could keep their cantonal bank accounts here.

I am so sick of people who do NOT follow the rules just because they can get away with it. Most of us DO follow the rules.

WE should NOT be the ones punished for doing so.

[LittleGirl]

19. Exactly!

I totally agree. Hubby is in Finance and files all our taxes for us.
He just finished our US and Swiss taxes this week.
I inherited a sum from my mother and he looked up and filed all of the paperwork necessary. We are planning to transfer back to the states as I’m done living here.
I hate the climate and want to live among English speakers again. He loves his job and is in no hurry, but I’m done. I can’t wait to leave and we’re not going back to my hometown either. I wouldn’t live there either because it’s the same climate. So we’re going somewhere where we don’t know anyone. Oh well.

[BlueMTexpat]

25. I wish you the best!

I was born, raised and educated in Montana for the first 20 years of my life, so I find the climate in Switzerland quite temperate, LOL.

I love living in my semi-rural commune in la Suisse romande - with excellent public transportation - where I can be in downtown Geneva in about 10 minutes and downtown Lausanne in 45+. With a Day Pass, I can go anywhere in the country on public transportation. And I do, now that I no longer work full-time and can enjoy it. Most recently, I enjoyed the interactive Frida Kahlo Exhibition in Lausanne. It was excellent.

From Geneva airport, I can easily go anywhere in the world, except - as we all learned to our chagrin - during times of pandemic, so long as I plan and budget well.

It does help to speak at least one of the three major Swiss languages fluently. From what I understand, more Americans seem to feel displacement in the German-speaking areas if they are not German speakers. Many people in the French-speaking areas, especially in and around Geneva and Lausanne, are also quite fluent in English.

I can certainly understand your feelings of displacement as they are shared by my husband who is not a French speaker. He was my "support" spouse while I was working full-time. But he found some interesting activities to keep himself occupied.

Have you explored what international groups or clubs, especially for women, are in your region? That might help.

The Swiss chapter of Democrats Abroad has some excellent people who are also lots of fun, btw. https://www.democratsabroad.org/ch

[LittleGirl]

26. I wished we lived south of the Alps

Better weather. I am a member of the Dems abroad group but they don’t have meetings that I can attend. They all work which is something I tried to do at age 55 when I got here. They laughed at my age and I never had another call again.

Most of the English speakers I’ve met were from the U.K. and they dismissed me. I’ve had a tough time making friends when I don’t have children, or grandchildren and don’t work. The isolation is something I’ve never experienced before and unfortunately my age has meant age related surgeries and months of sitting home recovering.

Thank you for your kindness and I had high hopes when we got here in the fall of 2014. It’s been the longest 8 years of my life. I look forward to having CH in the rear view mirror.

[BlueMTexpat]

27. I am so sorry to hear

about your experience. I also have had experiences where some Brits can be much snobbier than they accuse the French of being. I am a fluent French speaker so I have had nothing but good experiences with the French. In fact, I have actually found the French (and French speakers) to be more welcoming to expat Americans than Brits or even some US citizens are. That was also my experience in Morocco when I lived and worked there in the 60s and later, in the 80s.

It is also true that I most likely wouldn't have had the good experiences here that I have had if I had not been working where I could meet and work with so many interesting and talented people from all over the world while I was still in the workforce.

Our children were adults when my husband and I came to Switzerland and had jobs of their own in the US. But children/grandchildren can be incredible icebreakers anywhere in the world, especially if they are well-behaved. When my 10-year-old granddaughter visited me here (she is now 16 - time flies!), for example, people went out of their way to make her experience a wonderful one and I even learned things I hadn't known before. She loved everything about her visit. When we explored local playgrounds and/or activities especially for kids, she always found other kids with whom she could communicate and had a great time with them.

I am also fortunate in that where I live, my Swiss pass also works for the Léman Express train that serves several nearby areas in France. In fact, this whole geographic area is unique and known as "Le Grand Genève." As one former colleague said, "It has all the charm of the French with all the efficiency of the Germans." https://en.wikipedia.org/wiki/Grand_Gen%C3%A8ve

One last suggestion: have you explored volunteer opportunities with local non-governmental organizations and/or have you expressed interest in providing conversational opportunities for those who would like to learn or practice speaking English?

I understand that you are looking forward to your departure and I wish you all the best with that, especially since many of the warmer areas of the US seem to be in "red" states (my US residence is in very "blue" Columbia, Maryland and I also love that state). And yes, I know that just because a state is "red," it does not mean that there are not many good people who live there. I have friends and family living in those states and they are trying very hard to make things different. But it is true that "red" state governments seem more interested in maintaining a status quo that is not equitable for all.

But it would likely make you happier if you could make your Swiss experience a better one even during your last days here. May you and your husband fare well, wherever you go!

[LittleGirl]

28. We're hoping to get transferred

to CA because my hubby wants mild temps too. He grew up in London so loves the big city life. I’m a country girl and hate city life. Seriously, I’ve considered everything and volunteering but I don’t speak Swiss German and have no intention to learn it. In class they taught us high German but nobody speaks that so I gave up. My spouse speaks fluent German and he helps me occasionally. I learned the easy stuff because everyone speaks a little English here.

I joined a couple of groups but the Americans I met were freaking republicans! Even the British I met were republicans! I’ve just had bad luck and with the stress my autoimmune diseases flared up. Getting doctors to help me has been hard. I keep spreadsheets and I think they were intimidated by that.

I’ve pretty much checked out and have one foot here and one foot in the states. Poor hubby has to live with a grouch and I just can’t wait to go. We leave in early May for a month long visit to LA and SF. We’ll see his family and celebrate birthdays, graduation and seeing his terminal mother. I’ve lost two brothers and my mother since moving here so there’s nobody left in my home town except old friends.

Thanks for your suggestions. I hate winter which we have another week of to suffer with and hopefully the warmer temps and my recovery from surgery will be much easier then. Thanks so much. Hugs from Basel.

[BlueMTexpat]

31. Hugs back!

So sorry for all the losses, illnesses and surgeries that you've had to suffer at the same time!

May your wishes come true!

[LittleGirl]

32. Thank you so much! nt

[rickford66]

4. No surprise.

[Maeve]

5. How long has the term "Swiss bank account" been used to imply ill-gotten gains?

About a hundred years or so?

[BlueMTexpat]

11. That may be true in many cases.

But it is also a stereotype. Most of us are law-abiding citizens of both countries.

I'm sorry that my missive above became so massive. But it is an issue I am quite familiar with.

I've had so many face-to-face interactions with the tax authorities in Vaud (the canton where I reside) that they know me well.

We have even become as friendly as tax authorities and taxees can be, LOL.

[Maeve]

14. Your situation is quite different than the stereotype, true

You live there. The problem is that the banks have used neutrality to help the worst-of-the-worst hide assets (they also helped some escape the w-o-t-w, which is another story).

[BlueMTexpat]

15. THAT I thoroughly

agree with!

[BumRushDaShow]

13. I always chuckled about the movie of Dan Brown's book "The Da Vinci Code"

because it gave a glimpse of the mystique of the "Swiss vaults" and safe deposit boxes.

Then there is supposedly the real thing -

[Joinfortmill]

6. UnF*cking Believable. Goddamn crooks.

[Baitball Blogger]

7. IRS, do your thang.

[justhanginon]

9. How about naming names. These rich slimeballs have been cheating our

country for a very long time and it would be good to see just who they are and hopefully both shame and charge them in the courts. Their cheating on taxes makes us all have to pay more as they accumulate more and more wealth. That is just unbridled greed, unpatriotic and wrong on so many levels.

[rubbersole]

10. UBS isn't much of an improvement...

That's where Joe 'no public option for you' Lieberman slithered to for his 40 pieces of silver.

[Scalded Nun]

16. Damn!! Who would have thought???

[FakeNoose]

17. Here's a clue: Credit Suisse has hidden Russian oligarchs' wealth for almost 30 years

... and they aren't the only bank to do so. Sure Americans are hiding money in secret Swiss bank accounts, but they were late to the party. The Panama Papers showed that a lot of wealthy Americans had their money stashed in banks closer to home, such as Panama and Costa Rica, for example.

[mpcamb]

20. Credit Suisse loved Madoff till the swindle unfolded.

[CanonRay]

18. It's not tax dodging, it's called wealth management

when you get enough zeros.

[cstanleytech]

21. Will those wealthy Americans see prison time for this? I doubt it but even if they do it will be

a slap on the wrist at most.

[TexasBushwhacker]

29. It can happen if they file clearly fraudulent tax returns or don't file at all

If someone has the money or the potential to pay what they owe, the IRS usually prefers to make payment arrangements.

Wesley Snipes went to prison because he flat out didn't file tax returns for several years.

Todd and Julie Chrisley obtained over $20 Million in bank loans fraudulently, spent all the money and declared bankruptcy. That $20 Million in "forgiven" loans then becomes income, subject to income taxes. The banks even send you a 1099! The Chrisley's didn't declare that income on their tax return, therefore they were sent to prison for bank fraud and tax evasion.

[cstanleytech]

30. I'm talking about the truly wealthy that have major political connections.

[OneCrazyDiamond]

22. Guess they didn't learn after paying 2.8 Billion

https://thehill.com/policy/finance/238157-obama-makes-gains-in-war-on-tax-cheats/

[republianmushroom]

23. Oh, damn, the cats out of the bag.

It has been whispered for a long time.

[slightlv]

24. If corporations are people

shouldn't this one now be consigned to the death penalty?

[Grins]

33. Is this where we say, "Well, duh...". NM