After years of helping Americans with off-shore tax evasion, Credit Suisse is getting off easy in another case of too big to fail.
In May, the Swiss bank pleaded guilty to its charge and agreed to a $US2.6 billion fine, the largest criminal tax fine in U.S. history. But according to a troubling report from Newsweek, the U.S. Justice Department should have demanded a lot more.
In 2009, UBS faced similar charges and paid $US780 million in fines. However, it was also forced to name about 4,450 of its American clients to the IRS and Justice Department. In a case against Swiss bank Wegelin in 2012, prosecutors brought charges against the company’s bankers, lawyers, and advisors.
However, Credit Suisse executives faced no charges, and gave only about 200 names to the Justice Department, most of whom had already died, according to a Newsweek source. The bank also negotiated to avoid having its U.S. banking and investment licenses revoked.
Switzerland has laws against revealing names of clients, which makes it the go-to country for tax evasion. Prosecutors feared if they issues subpoenas, the Swiss government would block them, leading to fines that could result in Credit Suisse’s bankruptcy. The Justice Department also never enforced an indictment, concerned about how that would affect the global economy if Credit Suisse were to collapse. Protecting the bank from any real financial distress won out.
So Credit Suisse ends up paying a billion dollar fine that will barely affect it, according to CEO Brady Dougan. End of story.