The Department of Justice (DoJ)announced that Leodan Privatbank AG (Leodan), formerly known as PHZ Privat- und Handelsbank Zürich AG until it changed its name in August 2015, reached a solution under US Tax Program. The bank signed a Non-Prosecution Agreement (NPA) and will pay a penalty of $500k.
According to the DoJ, until June 2013, Leodan conducted a US cross-border banking business ‘that aided and assisted certain of its U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the US government’. Six private bankers, including the CEO, serviced the 44 US-related accounts at the bank.
Leodan offered a variety of traditional Swiss banking services, including hold mail, code-name or numbered account services, and sham entities that it knew could assist US clients in the concealment of assets and income from the Internal Revenue Service (IRS).
The DoJ states that ‘Leodan opened 19 US-related accounts for 13 clients of EAM #1. Of these 19 accounts, 16 were structured accounts held by non-US domiciled entities. EAM #1 served as a director of his 16 structured accounts at Leodan, and EAM #1 had a power of attorney for the non-U.S. domiciled entity that held the account in its name. The relationship with EAM #1 brought more than 40 percent of the US-related accounts to Leodan. EAM #1 was later indicted in the United States for conspiring with US taxpayers to help them evade their US tax obligations. Between May 2011 and October 2012, Leodan made no efforts to ascertain the status of the criminal investigation against EAM #1.’
In the Leodan’s NPA we learn that during the period since August, 2008, the bank held a total of 44 US-related accounts, which included both declared and undeclared accounts, with an aggregate peak of approximately $59.42m in assets under management. Leodan will pay a penalty of $500k.