The toll for misconduct at the fallen Swiss bank Credit Suisse just keeps getting bigger.
Federal prosecutors said on Monday that UBS, which rescued Credit Suisse from the brink of collapse two years ago, would pay $510 million in fines for the role Credit Suisse played in helping clients evade taxes.
Credit Suisse, among other moves, helped clients hide more than $4 billion from the Internal Revenue Service in at least 475 accounts, prosecutors said. Credit Suisse’s Singapore office was singled out for holding undeclared accounts for people who owed taxes.
The bank pleaded guilty to, in the words of prosecutors, enabling “U.S. customers to evade their U.S. tax obligations in several ways, including by opening and maintaining undeclared offshore accounts for U.S. taxpayers at Credit Suisse A.G., and providing a variety of offshore private banking services that assisted U.S. taxpayers in the concealment of their assets and income from the I.R.S.”
Prosecutors said bankers at Credit Suisse had faked records, processed false donations and done business with more than $1 billion in accounts without feigning effort at tax compliance.
UBS reported some suspicious transactions to authorities after it merged with Credit Suisse in 2023. UBS anticipated the fine and had set aside some money to pay for it, the bank said in a statement.
The Department of Justice said its investigation had stretched several years. Prosecutors may not yet be done, either, since Monday’s announcement included a commitment by the bank to cooperate in unspecified active investigations.
“UBS was not involved in the underlying conduct and has zero tolerance for tax evasion,” the bank said in its unsigned statement, which described the matter as “another of Credit Suisse’s legacy issues.”
Two years ago, Credit Suisse crumbled in a matter of weeks after a series of scandals, lawsuits and management changes. It lost $5.5 billion in the unwinding of a onetime star investment fund, Archegos Capital Management.
UBS paid nearly $400 million to cover regulatory fines related to that turmoil.
UBS, under pressure from the Swiss authorities, rescued Credit Suisse for $3.2 billion in 2023.
