Tuesday, November 22, 2016

Credit Suisse Being Investigated for Omitting at Least One Large Account (11/22/16)

Dan Horsky recently made the news, including this blog, for a plea agreement related to very large offshore accounts, including at least one in Switzerland.  See Former Business Professor Pleads Guilty to Tax Related Crimes; In Addition, Will Pay $100 Million FBAR Penalty (Federal Tax Crimes Blog 11/4/16; 11/9/16), here.  Bloomberg reports that Credit Suisse is being investigated for not earlier coming clean when supposedly getting right with DOJ Tax.  See David Voreacos, Credit Suisse Faces Tax Probe Over Undeclared Accounts (Bloomberg 11/22/16), here.

Here are some excerpts:
When Credit Suisse AG pleaded guilty in 2014 to helping Americans cheat on their taxes, it promised to help the U.S. root out suspicious accounts. Now, U.S. investigators want to know why the Swiss bank neglected to tell them about $200 million in undeclared assets owned by an American client, according to people familiar with the matter. 
The client, Dan Horsky, a citizen of the U.S., U.K. and Israel, pleaded guilty Nov. 4 to conspiring to defraud the Internal Revenue Service. He has been cooperating for more than a year with investigators examining whether the bank helped clients with ties to Israel evade U.S. taxes, said five people who weren’t authorized to discuss the case publicly. 
The Horsky accounts were considered "toxic” on the bank’s Israel desk because they were hidden from the IRS using methods like those that led to Credit Suisse’s guilty plea, the people said. The U.S. learned about Horsky’s accounts independent of Credit Suisse and after the bank had entered its guilty plea, they said. Credit Suisse could face a new civil or criminal case based on the Horsky probe, the people said. 
“If they didn’t provide information about this account when they had it in their files, there was either gross negligence or more likely some kind of conspiracy at the bank to avoid disclosing this account,” said Larry Campagna, a Houston tax attorney, when told by Bloomberg News about the new Credit Suisse inquiry. 
* * * * 
Toxic’ Accounts 
His holdings were among undisclosed accounts serviced by Credit Suisse bankers in Zurich who helped people with Israeli citizenship, according to three people familiar with the matter.  
Horsky’s accounts were considered “toxic” on Credit Suisse’s Israel desk as Swiss banks came under increasing pressure after 2009 to jettison undeclared U.S. assets, the people said. That year, UBS Group AG, Switzerland’s largest bank, admitted that it helped Americans evade taxes.
JAT Comments:

1.  The article does not explain all of the circumstances for the failure to disclose Horsky's account(s).  Hence, I cannot conclude whether it is a simple mistake, a major breakdown in internal communications or something worse.  In any events, it is likely to be a costly mistake for CS.

2.  The article rehashes some of the earlier information about the plea agreement and the circumstances involved.  I did not excerpt that above, because readers of this blog will already know most of it.

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