According to federal prosecutors, Swiss private bank Banque Pictet has admitted to assisting US taxpayers in hiding more than $5.6 billion from the Internal Revenue Service (IRS) and has entered into a deferred prosecution agreement with the Justice Department.
Prosecutors claim that between 2008 and 2014, US taxpayers with Pictet accounts in Switzerland and elsewhere evaded $50.6 million in taxes. Banque Pictet agreed to pay the US Treasury $122.9 million as part of the agreement.
“This case should provide a clear message to others who try to hide their assets and income offshore,” Jim Lee, the chief of the IRS’ criminal investigation division, said in a statement.
Pictet, which manages 632 billion Swiss francs ($724 billion) in client assets, will implement corrective measures and cooperate with the authorities’ investigation as part of the agreement. If it complies for three years, US prosecutors will request that charges of conspiracy to defraud the IRS be dropped.
“Pictet is pleased to have resolved this matter and will continue to take steps to ensure its clients meet their tax obligations,” according to a statement issued by the bank.
US authorities have long accused Swiss banks of assisting wealthy Americans in evading taxes, and Pictet indicated that it had been in contact with the US for more than a decade.
Credit Suisse agreed to pay a $2.5 billion fine in 2014 for assisting Americans in evading taxes in a decades-long conspiracy. Former rival UBS has since taken over the bank.
Two former Julius Baer bankers pleaded guilty in 2016 to assisting American clients in evading taxes, and the bank agreed to pay $547 million to settle the criminal case.
Prosecutors claimed that while Pictet took some steps to ensure U.S. clients followed the law, it also assisted some customers in hiding funds from the IRS in offshore accounts.
According to prosecutors, the bank’s disgorgement of funds includes $52 million in fees earned by Pictet from the undeclared accounts, $32 million in unpaid taxes, and a $39 million penalty.
The agreement comes as Renaud de Planta, Pictet’s senior partner since 2019, prepares to step down, to be succeeded by Marc Pictet on July 1.