Credit Suisse CEO fights back on tax evasion claims

Wed Feb 26, 2014 12:06pm EST
 
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By Katharina Bart

ZURICH (Reuters) - Credit Suisse's chief executive will hit back at allegations the Swiss bank was a willing accomplice in U.S. tax evasion on Wednesday, blaming instead a small group of its private bankers for helping Americans conceal their wealth.

Brady Dougan will tell U.S. senators that Credit Suisse only uncovered "scattered evidence" of improper conduct, and its top managers were not aware that a small group of Swiss-based private bankers helped U.S. customers hide income and assets.

"We deeply regret that - despite the industry-leading compliance measures we have put in place - before 2009, some Credit Suisse private bankers appear to have violated U.S. law," Dougan said in prepared remarks, released before his appearance later on Wednesday in front of a U.S. Senate subcommittee on offshore tax evasion.

"The evidence showed that some Swiss-based private bankers went to great lengths to disguise their bad conduct from Credit Suisse executive management."

Credit Suisse has been accused by U.S. senators of helping American customers dodge taxes with a variety of tactics, including creating offshore shell entities, falsifying visa applications and establishing a branch at Zurich airport, where wealthy U.S. clients could fly in, conduct their banking and leave.

One Credit Suisse banker even handed account statements to a client tucked inside a Sports Illustrated magazine, according to a scathing report released by the Senate Permanent Subcommittee on Investigations on Tuesday.

In his testimony, Dougan disputes some of the methods used and some of the finding of the Senate report, saying the subcommittee improperly assumed every U.S. client account held in Switzerland was hidden from the U.S. government.

The report said that in 2006, Credit Suisse held 22,000 accounts from U.S. customers worth 12 billion Swiss francs ($13.5 billion).   Continued...

 
Credit Suisse CEO Brady Dougan testifies before the Senate Homeland and Governmental Affairs Investigations Subcommittee on Capitol Hill in Washington February 26, 2014. REUTERS/Gary Cameron