GENEVA — Credit Suisse violated a plea agreement with U.S. authorities by failing to report secret offshore accounts that wealthy Americans used to avoid paying taxes, U.S. lawmakers said Wednesday, releasing a two-year investigation that detailed the role employees at the embattled Swiss bank had in aiding tax evasion by clients.
Seth Wenig, Associated Press
A sign displays the name of Credit Suisse on the floor at the New York Stock Exchange on March 15 in New York.
The U.S. Senate Finance Committee pointed to an ongoing, possibly criminal conspiracy tied to nearly $100 million in accounts belonging to a family of American taxpayers that the bank did not disclose. It also said Credit Suisse helped a U.S. businessman hide more than $220 million in offshore accounts from the IRS.
Credit Suisse revealed that it had found 23 accounts each worth more than $20 million that were not declared to tax authorities, many of them unveiled just days before the report was released, according to the committee. It said its findings show that more than $700 million was concealed in violation of the bank’s 9-year-old plea deal with the U.S. Justice Department.
“Credit Suisse got a discount on the penalty it faced in 2014 for enabling tax evasion because bank executives swore up and down they’d get out of the business of defrauding the United States,” said Sen. Ron Wyden, the Democratic chairman of the committee.
“This investigation shows Credit Suisse did not make good on that promise, and the bank’s pending acquisition does not wipe the slate clean,” he said.
The Swiss government pressed for a $3.25 billion takeover of long-troubled Credit Suisse by rival bank UBS this month amid turmoil in the global financial system. The collapse of two U.S. banks ignited wider fears that sent shares of Switzerland’s second-largest bank tumbling as customers withdrew their money.
The Senate findings pose new problems for UBS as it tries to absorb Credit Suisse and create a single Swiss megabank, coming the same day that UBS named a new CEO to help push through the takeover. It’s also Credit Suisse’s latest run-in with U.S. authorities, following settlements worth hundreds of millions of dollars over mortgage-backed securities that were behind the 2008 financial crisis.
Credit Suisse, whose yearslong troubles range from hedge fund losses to fines for failing to prevent money laundering by a Bulgarian cocaine ring, said it “does not tolerate tax evasion” and insisted that the Senate report described “legacy issues” — some dating to a decade ago — that have been addressed since.
“We have implemented extensive enhancements since then to root out individuals who seek to conceal assets from tax authorities,” the Zurich-based bank said.
“Our clear policy is to close undeclared accounts when identified and to discipline any employee who fails to comply with bank policy or falls short of Credit Suisse’s standards of conduct,” it said.
UBS said it has assessed outstanding lawsuits and investigations as part of the Credit Suisse acquisition and expects the deal to be beneficial for shareholders. It’s working to close the sale and get approval from regulators in the coming weeks or months.
The Senate report noted Credit Suisse’s cooperation with the investigation, including having appointed new leadership.
The Swiss lender paid a discounted fine of $1.3 billion to the U.S. Justice Department after pleading guilty in 2014 to conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other documents with the IRS.
The bank acknowledged “knowingly and willfully” helping thousands of Americans open accounts that weren’t declared to tax authorities and concealing offshore assets. It avoided criminal charges in exchange for agreeing to report undeclared accounts and provide other information to U.S. officials.
The Senate committee said secret offshore accounts belonging to a family of dual U.S.-Latin American citizens and worth nearly $100 million were closed in 2013 but the money was transferred to other banks without telling U.S. authorities.
With that maneuver, “Credit Suisse enabled what appears to be potentially criminal tax evasion by a client to go undetected for almost a decade,” the report says.
The committee said former senior bankers helped manage that family’s accounts. In addition, Credit Suisse employees helped a U.S. businessman hide $220 million from U.S. authorities despite long knowing he was an American, according to the report, which said whistleblowers flagged the scheme after the plea deal.
Credit Suisse workers were incentivized to help accounts hide U.S. ties because their bonuses depend on the amount of money being managed, the report said. To that end, employees who had clients with assets above $20 million or $30 million may have given those accounts special consideration because it would mean they got larger bonuses, the committee said.
Investigators say bankers figured out how to code accounts for Americans who possess dual citizenship. Those bankers would use the non-U.S. passport of wealthy individuals to evade internal systems designed to look for identifying marks in U.S. passports.
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US: Credit Suisse violates deal on rich clients’ tax evasion
Stephen Bakin
Photo Credit: Stephen Bakin / Shutterstock
The COVID-19 pandemic dramatically shifted the economic landscape in the United States, and the effects are still lingering. These repercussions have been felt around the world, and their effects have altered local economies as well. In areas where remote work increased, considerations around transit, zoning laws, taxes, and broadband internet have taken center stage. In addition to changing office culture, the popularity of remote work is helping to transform the economic map as hundreds of thousands of Americans have left coastal cities like New York and San Francisco to live in more affordable locations in southern or mountain states. Meanwhile, after persistent supply chain disruptions, there has been a resurgent emphasis on domestic manufacturing, impacting certain areas of the country more than others.
With fluctuating economic changes across the U.S., it’s difficult to gauge how the country is recovering as a whole, as well as how local economies are faring. Fortunately, one way to measure the virus’s economic impact is through gross domestic product (GDP).
Stephen Bakin
Photo Credit: Stephen Bakin / Shutterstock
The COVID-19 pandemic dramatically shifted the economic landscape in the United States, and the effects are still lingering. These repercussions have been felt around the world, and their effects have altered local economies as well. In areas where remote work increased, considerations around transit, zoning laws, taxes, and broadband internet have taken center stage. In addition to changing office culture, the popularity of remote work is helping to transform the economic map as hundreds of thousands of Americans have left coastal cities like New York and San Francisco to live in more affordable locations in southern or mountain states. Meanwhile, after persistent supply chain disruptions, there has been a resurgent emphasis on domestic manufacturing, impacting certain areas of the country more than others.
With fluctuating economic changes across the U.S., it’s difficult to gauge how the country is recovering as a whole, as well as how local economies are faring. Fortunately, one way to measure the virus’s economic impact is through gross domestic product (GDP).
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US: Credit Suisse violates deal on rich clients’ tax evasion
GDP is the value of all goods and services produced in an economy, and in the U.S., its path since the onset of the COVID-19 pandemic provides the most basic measure of the virus’s impact on the economy. Although U.S. GDP has averaged an annual inflation-adjusted growth rate of over 3% since 1929, the pandemic caused historic drops in 2020. Real GDP dropped 2.7% from 2019 to 2020. Prior to 2020, the last time GDP fell was in 2009 during the Great Recession, decreasing 1.6% from 2008. And before that, a drop in GDP had not occurred since the early 1980s.
While U.S. GDP in aggregate decreased from 2019 to 2020, gross private domestic investments decreased by 5.5% and the trade deficit grew by 7.1%. Personal consumption expenditures decreased by 3.1%, while government consumption expenditures and gross investment actually increased by 3.2%. Fortunately, the U.S. is showing signs of recovery, with a 5.7% increase in GDP from 2020 to 2021, and a smaller yet still noteworthy 1.1% increase from 2021 to 2022.
GDP is the value of all goods and services produced in an economy, and in the U.S., its path since the onset of the COVID-19 pandemic provides the most basic measure of the virus’s impact on the economy. Although U.S. GDP has averaged an annual inflation-adjusted growth rate of over 3% since 1929, the pandemic caused historic drops in 2020. Real GDP dropped 2.7% from 2019 to 2020. Prior to 2020, the last time GDP fell was in 2009 during the Great Recession, decreasing 1.6% from 2008. And before that, a drop in GDP had not occurred since the early 1980s.
While U.S. GDP in aggregate decreased from 2019 to 2020, gross private domestic investments decreased by 5.5% and the trade deficit grew by 7.1%. Personal consumption expenditures decreased by 3.1%, while government consumption expenditures and gross investment actually increased by 3.2%. Fortunately, the U.S. is showing signs of recovery, with a 5.7% increase in GDP from 2020 to 2021, and a smaller yet still noteworthy 1.1% increase from 2021 to 2022.
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US: Credit Suisse violates deal on rich clients’ tax evasion
While total GDP includes consumer spending, business spending, government spending, and international trade, contributions to GDP vary widely by industry. In 2021, real estate alone accounted for over 11% of U.S. GDP, amounting to over $2.6 trillion in economic activity. The next largest industry was finance and insurance, which accounted for 8.4% of U.S. GDP. State and local government spending was not far behind in third, making up 8.3% of U.S. GDP. Manufacturing of non-durable goods contributed the least of all industry groups, but still made up 4.7% of U.S. GDP.
While total GDP includes consumer spending, business spending, government spending, and international trade, contributions to GDP vary widely by industry. In 2021, real estate alone accounted for over 11% of U.S. GDP, amounting to over $2.6 trillion in economic activity. The next largest industry was finance and insurance, which accounted for 8.4% of U.S. GDP. State and local government spending was not far behind in third, making up 8.3% of U.S. GDP. Manufacturing of non-durable goods contributed the least of all industry groups, but still made up 4.7% of U.S. GDP.
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US: Credit Suisse violates deal on rich clients’ tax evasion
GDP can vary dramatically by location, and the states with the highest GDP per capita are found on the east and west coasts. New York leads in GDP per capita at $95,851, with Massachusetts and Washington coming in second and third, at $91,819 and $87,546 respectively. California is not far behind with the fourth-highest GDP per capita, producing $85,969 of economic output per resident. Coastal access is vital for international trade, with more than 90% of world trade using sea routes to transport goods back and forth. Millions of jobs are also directly dependent on the resources of the oceans and Great Lakes, so it makes sense that the majority of large U.S. metros with the biggest economies are also on the coasts, or bordering Lake Superior or Lake Michigan.
Collectively, southeastern states have lower GDP per capita, with five southeastern states including South Carolina, Alabama, Arkansas, West Virginia, and Mississippi falling in the bottom 20% of all 50 states. Mississippi has the lowest GDP per capita at $43,156—less than half the GDP per capita of New York.
The data used in this analysis is from the U.S. Bureau of Economic Analysis. To determine the locations with the largest economies, researchers at Smartest Dollar calculated the gross domestic product per capita. In the event of a tie, the location with the greater total gross domestic product was ranked higher.
Here are the U.S. metropolitan areas with the largest economies.
GDP can vary dramatically by location, and the states with the highest GDP per capita are found on the east and west coasts. New York leads in GDP per capita at $95,851, with Massachusetts and Washington coming in second and third, at $91,819 and $87,546 respectively. California is not far behind with the fourth-highest GDP per capita, producing $85,969 of economic output per resident. Coastal access is vital for international trade, with more than 90% of world trade using sea routes to transport goods back and forth. Millions of jobs are also directly dependent on the resources of the oceans and Great Lakes, so it makes sense that the majority of large U.S. metros with the biggest economies are also on the coasts, or bordering Lake Superior or Lake Michigan.
Collectively, southeastern states have lower GDP per capita, with five southeastern states including South Carolina, Alabama, Arkansas, West Virginia, and Mississippi falling in the bottom 20% of all 50 states. Mississippi has the lowest GDP per capita at $43,156—less than half the GDP per capita of New York.
The data used in this analysis is from the U.S. Bureau of Economic Analysis. To determine the locations with the largest economies, researchers at Smartest Dollar calculated the gross domestic product per capita. In the event of a tie, the location with the greater total gross domestic product was ranked higher.
Here are the U.S. metropolitan areas with the largest economies.
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US: Credit Suisse violates deal on rich clients’ tax evasion
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Jonathan Siegel / Shutterstock
- Gross domestic product per capita: $80,398
- Total gross domestic product: $764,583,227,000
- Private industry gross domestic product: $699,561,390,000
- Government gross domestic product: $65,021,837,000
- Personal income per capita: $71,992
Shutterstock
Photo Credit: Jonathan Siegel / Shutterstock
- Gross domestic product per capita: $80,398
- Total gross domestic product: $764,583,227,000
- Private industry gross domestic product: $699,561,390,000
- Government gross domestic product: $65,021,837,000
- Personal income per capita: $71,992
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: IVY PHOTOS / Shutterstock
- Gross domestic product per capita: $80,468
- Total gross domestic product: $296,969,112,000
- Private industry gross domestic product: $270,587,437,000
- Government gross domestic product: $26,381,674,000
- Personal income per capita: $71,912
Shutterstock
Photo Credit: IVY PHOTOS / Shutterstock
- Gross domestic product per capita: $80,468
- Total gross domestic product: $296,969,112,000
- Private industry gross domestic product: $270,587,437,000
- Government gross domestic product: $26,381,674,000
- Personal income per capita: $71,912
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Steve Heap / Shutterstock
- Gross domestic product per capita: $81,011
- Total gross domestic product: $163,031,737,000
- Private industry gross domestic product: $151,767,560,000
- Government gross domestic product: $11,264,177,000
- Personal income per capita: $70,026
Shutterstock
Photo Credit: Steve Heap / Shutterstock
- Gross domestic product per capita: $81,011
- Total gross domestic product: $163,031,737,000
- Private industry gross domestic product: $151,767,560,000
- Government gross domestic product: $11,264,177,000
- Personal income per capita: $70,026
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Dancestrokes / Shutterstock
- Gross domestic product per capita: $81,548
- Total gross domestic product: $267,973,544,000
- Private industry gross domestic product: $218,311,085,000
- Government gross domestic product: $49,662,459,000
- Personal income per capita: $72,637
Shutterstock
Photo Credit: Dancestrokes / Shutterstock
- Gross domestic product per capita: $81,548
- Total gross domestic product: $267,973,544,000
- Private industry gross domestic product: $218,311,085,000
- Government gross domestic product: $49,662,459,000
- Personal income per capita: $72,637
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Roschetzky Photography / Shutterstock
- Gross domestic product per capita: $82,372
- Total gross domestic product: $193,773,558,000
- Private industry gross domestic product: $174,336,210,000
- Government gross domestic product: $19,437,348,000
- Personal income per capita: $71,372
Shutterstock
Photo Credit: Roschetzky Photography / Shutterstock
- Gross domestic product per capita: $82,372
- Total gross domestic product: $193,773,558,000
- Private industry gross domestic product: $174,336,210,000
- Government gross domestic product: $19,437,348,000
- Personal income per capita: $71,372
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Nicholas Courtney / Shutterstock
- Gross domestic product per capita: $85,246
- Total gross domestic product: $253,399,051,000
- Private industry gross domestic product: $228,516,751,000
- Government gross domestic product: $24,882,300,000
- Personal income per capita: $78,150
Shutterstock
Photo Credit: Nicholas Courtney / Shutterstock
- Gross domestic product per capita: $85,246
- Total gross domestic product: $253,399,051,000
- Private industry gross domestic product: $228,516,751,000
- Government gross domestic product: $24,882,300,000
- Personal income per capita: $78,150
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Chones / Shutterstock
- Gross domestic product per capita: $86,532
- Total gross domestic product: $1,124,682,354,000
- Private industry gross domestic product: $1,020,236,603,000
- Government gross domestic product: $104,445,751,000
- Personal income per capita: $75,821
Shutterstock
Photo Credit: Chones / Shutterstock
- Gross domestic product per capita: $86,532
- Total gross domestic product: $1,124,682,354,000
- Private industry gross domestic product: $1,020,236,603,000
- Government gross domestic product: $104,445,751,000
- Personal income per capita: $75,821
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Jon Bilous / Shutterstock
- Gross domestic product per capita: $87,884
- Total gross domestic product: $106,507,622,000
- Private industry gross domestic product: $95,316,842,000
- Government gross domestic product: $11,190,780,000
- Personal income per capita: $69,951
Shutterstock
Photo Credit: Jon Bilous / Shutterstock
- Gross domestic product per capita: $87,884
- Total gross domestic product: $106,507,622,000
- Private industry gross domestic product: $95,316,842,000
- Government gross domestic product: $11,190,780,000
- Personal income per capita: $69,951
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: photo.ua / Shutterstock
- Gross domestic product per capita: $93,815
- Total gross domestic product: $118,494,536,000
- Private industry gross domestic product: $106,503,327,000
- Government gross domestic product: $11,991,209,000
- Personal income per capita: $61,551
Shutterstock
Photo Credit: photo.ua / Shutterstock
- Gross domestic product per capita: $93,815
- Total gross domestic product: $118,494,536,000
- Private industry gross domestic product: $106,503,327,000
- Government gross domestic product: $11,991,209,000
- Personal income per capita: $61,551
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: f11photo / Shutterstock
- Gross domestic product per capita: $95,593
- Total gross domestic product: $607,628,505,000
- Private industry gross domestic product: $471,029,245,000
- Government gross domestic product: $136,599,261,000
- Personal income per capita: $80,822
Shutterstock
Photo Credit: f11photo / Shutterstock
- Gross domestic product per capita: $95,593
- Total gross domestic product: $607,628,505,000
- Private industry gross domestic product: $471,029,245,000
- Government gross domestic product: $136,599,261,000
- Personal income per capita: $80,822
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Lukas Uher / Shutterstock
- Gross domestic product per capita: $100,806
- Total gross domestic product: $1,992,779,274,000
- Private industry gross domestic product: $1,818,524,851,000
- Government gross domestic product: $174,254,423,000
- Personal income per capita: $85,136
Shutterstock
Photo Credit: Lukas Uher / Shutterstock
- Gross domestic product per capita: $100,806
- Total gross domestic product: $1,992,779,274,000
- Private industry gross domestic product: $1,818,524,851,000
- Government gross domestic product: $174,254,423,000
- Personal income per capita: $85,136
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Sean Pavone / Shutterstock
- Gross domestic product per capita: $108,506
- Total gross domestic product: $531,671,846,000
- Private industry gross domestic product: $488,538,006,000
- Government gross domestic product: $43,133,840,000
- Personal income per capita: $92,290
Shutterstock
Photo Credit: Sean Pavone / Shutterstock
- Gross domestic product per capita: $108,506
- Total gross domestic product: $531,671,846,000
- Private industry gross domestic product: $488,538,006,000
- Government gross domestic product: $43,133,840,000
- Personal income per capita: $92,290
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Jeremy Janus / Shutterstock
- Gross domestic product per capita: $119,646
- Total gross domestic product: $479,966,484,000
- Private industry gross domestic product: $437,233,616,000
- Government gross domestic product: $42,732,868,000
- Personal income per capita: $89,274
Shutterstock
Photo Credit: Jeremy Janus / Shutterstock
- Gross domestic product per capita: $119,646
- Total gross domestic product: $479,966,484,000
- Private industry gross domestic product: $437,233,616,000
- Government gross domestic product: $42,732,868,000
- Personal income per capita: $89,274
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: yhelfman / Shutterstock
- Gross domestic product per capita: $144,633
- Total gross domestic product: $668,677,573,000
- Private industry gross domestic product: $618,221,905,000
- Government gross domestic product: $50,455,668,000
- Personal income per capita: $123,711
Shutterstock
Photo Credit: yhelfman / Shutterstock
- Gross domestic product per capita: $144,633
- Total gross domestic product: $668,677,573,000
- Private industry gross domestic product: $618,221,905,000
- Government gross domestic product: $50,455,668,000
- Personal income per capita: $123,711
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US: Credit Suisse violates deal on rich clients’ tax evasion
Shutterstock
Photo Credit: Uladzik Kryhin / Shutterstock
- Gross domestic product per capita: $210,235
- Total gross domestic product: $410,418,579,000
- Private industry gross domestic product: $395,093,204,000
- Government gross domestic product: $15,325,375,000
- Personal income per capita: $136,338
Shutterstock
Photo Credit: Uladzik Kryhin / Shutterstock
- Gross domestic product per capita: $210,235
- Total gross domestic product: $410,418,579,000
- Private industry gross domestic product: $395,093,204,000
- Government gross domestic product: $15,325,375,000
- Personal income per capita: $136,338
