The US Department of Justice (DoJ) announced today that Cornèr Banca SA (Corner) and Bank Coop AG (Bank Coop) reached a solutions under US Tax Program.
For 40 years, Corner specialises in credit and prepaid debit cards under CornèrCard brand name.
According to the DoJ’s statement, ‘Corner assisted certain of its US clients to evade their US tax obligations, file false federal tax returns with the Internal Revenue Service (IRS) and hide overseas assets from the IRS. Cornèr also maintained correspondent accounts at a US bank to facilitate certain transactions for its clients’.
Corner relationship managers traveled to the US with the approval of the management, and sometimes with the managers, on at least 10 occasions to visit existing bank clients. During the meetings they discussed matters relating to accounts fund transfer to the US.
In August 2008, Corner’s executive board decided that:
- There would be no changes to Corner’s existing US-related accounts at that time, based on the board’s assessment that Corner had not engaged in the same type of conduct as had UBS;
- Corner would continue accepting new U.S. clients, but only after review by Corner’s compliance department and approval by an executive board member; and
- Corner would not accept any new US clients coming from UBS.
However, after August 2008, the bank accepted new US-related accounts from UBS and including one accounts without approval by an executive board member.
Moreover, Corner had US-related accounts that were beneficially owned by US persons but held in the names of corporations, foundations or trusts. The structures were organized under the laws of various jurisdictions, including the Bahamas, Belize, the British Virgin Islands, Jersey, Liberia, Liechtenstein, the Marshall Islands, the Netherlands Antilles, Panama, St. Kitts and Nevis, St. Vincent and the Grenadines and Uruguay.
In the Corner’s NPA we learn that since August, 2008, Corner held 383 US-related accounts with over $351m in assets and will pay a penalty of $5.068m.
As a reminder Bank Coop main shareholder is Basler Kantonalbank since December 1999.
Along with traditional private banking services, Bank Coop accepted regular instructions from one US citizen and resident to transfer approximately $9,500 to his account in the US each month. Bank Coop also accepted to proceed with substantial cash withdrawals in connection with the closure of a number of US-related accounts.
Bank Coop also opened and maintained accounts in the name of non-US entities, while knowing that US taxpayers were the true beneficial owners of the funds.
Moreover, after August, 2008, Bank Coop opened accounts for US residents who transferred assets from other Swiss financial institutions such as UBS and Credit Suisse AG knowing that it was likely that the assets were undeclared.
The Bank Coop’s NPA state that since August, 2008, the bank maintained 385 US-related accounts, with an aggregate maximum balance of approximately $71.4m. Bank Coop will pay a penalty of $3.223m.