Justice Department Announces Deferred Prosecution Agreement With Basler Kantonalbank

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https://www.justice.gov/opa/pr/justice-department-announces-deferred-prosecution-agreement-basler-kantonalbank

Department of Justice
Office of Public Affairs

FOR IMMEDIATE RELEASE
Tuesday, August 28, 2018

Justice Department Announces Deferred Prosecution Agreement With Basler Kantonalbank

Bank Admits to Helping U.S. Taxpayers Conceal Income and Assets from the United States; Agrees to Pay $60.4 Million

Basler Kantonalbank (BKB), a bank headquartered in Basel, Switzerland, entered into a deferred prosecution agreement (DPA) that was approved today by the U.S. District Court for the Southern District of Florida, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Department of Justice’s Tax Division, United States Attorney Benjamin G. Greenberg, and Chief Don Fort for Internal Revenue Service-Criminal Investigation. As part of the agreement, Basler Kantonalbank will pay $60.4 million in total penalties.
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In the DPA and related court documents, BKB admits that between 2002 and 2012 it conspired with its employees, external asset managers, and clients to: 1) defraud the United States with respect to taxes; 2) commit tax evasion; and 3) file false federal tax returns. At its peak in 2010, the bank held approximately 1,144 accounts for U.S. customers, with an aggregate value of approximately $813.2 million (many, but not all of which, were undeclared accounts that were part of the conspiracy). According to the terms of the DPA approved today, BKB will cooperate fully, subject to applicable laws and regulations, with the United States, the Internal Revenue Service (IRS), and other U.S. authorities. The DPA also requires BKB to affirmatively disclose certain material information it may later uncover regarding U.S.-related accounts, as well as to disclose certain information consistent with the Department’s Swiss Bank Program with respect to accounts closed between January 1, 2009, and December 31, 2017. Under the DPA, prosecution against the bank for conspiracy will be deferred for an initial period of three years to allow BKB to demonstrate good conduct.

The $60.4 million penalty against BKB has three parts. First, BKB agreed to pay $17,200,000 in restitution to the IRS, which represents the unpaid taxes resulting from BKB’s participation in the conspiracy. Second, BKB agreed to forfeit $29,700,000 to the United States, which represents gross fees (not profits) that the bank earned on its undeclared accounts between 2002 and 2012. Finally, BKB agreed to pay a fine of $13,500,000. This penalty amount reflects BKB’s thorough internal investigation and cooperation with the United States, as well as the bank’s extensive efforts at remediation, and its waiver of any claim of foreign sovereign immunity. Among other remedial efforts, BKB implemented measures to require all U.S.-related accounts be tax compliant, closed a branch office responsible for much of the tax fraud and fired the employees involved in the offense, and conducted extensive outreach to former clients to encourage them to participate in IRS-sponsored voluntary disclosure programs.
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