In the run up to year-end, the US Department of Justice (DoJ) announced that Bordier & Cie Switzerland (Bordier), PBZ Verwaltungs AG (PBZ) and PostFinance AG reached individual solutions under the US Tax Program. These Category 2 banks will pay collectively penalties of over $15m.
In the DoJ’s statement Bordier is known to have been aware ‘that some of its US clients were using their accounts at Bordier to evade US taxes and reporting requirements. In certain account files, Bordier had notes stating, “Declared: No.” In other instances, the US taxpayer-client informed Bordier that he or she did not plan to declare his or her account in the United States’. ‘In a limited number of instances, Bordier actively facilitated the evasion of U.S. taxes and reporting requirements for some of its U.S. account-holders’ adds the DoJ.
In the Bordier’s NPA we learn that since August 2008, the bank maintained approximately 292 US-related accounts with a total of $440.8m in assets under management. Bordier will pay a penalty of $7.827m.
PBZ was a private bank operating in Zurich. It ceased its banking activities and had its banking license revoked by Aug. 29, 2014.
Since 2008, PBZ knew that a number US-related accounts were opened, maintained, and serviced for US persons that it knew or had reason to know were not declared to the Inland Revenue Service (IRS) or the US Department of the Treasury, as required by US law. According to the DoJ ‘as of February 19, 2010, PBZ formally renounced its previous practice of accepting “manifestly untaxed assets from foreign clients”’.
PBZ also offered a variety of traditional Swiss banking services – including hold mail, numbered accounts and accounts for foundations and other entities – that it knew could assist, and did assist, US taxpayers in concealing their identity from the IRS. Furthermore, PBZ assisted its US clients in sending money to themselves, relatives, business partners or other businesses in the United States by issuing checks drawn on PBZ’s own bank account.
In the PBZ’s NPA we learn that from 2008 through 2014, the bank maintained and serviced 171 US-related accounts having a maximum aggregate value of over $101m. PBZ will pay a penalty of $5.57m.
PostFinance is a wholly-owned subsidiary of the Swiss post responsible for postal and other public infrastructure services. PostFinance became a bank under Swiss law.
PostFinance is required by Swiss law and government mandate to provide accounts to persons living in Switzerland, regardless of nationality, and to Swiss nationals living outside of Switzerland. Consequently, PostFinance provided accounts to US taxpayers living in Switzerland, as well as to Swiss nationals living in the United States, including US-related account-holders who transferred assets from UBS or other banks that were under investigation by the department – the so-called Category 1 banks.
The DoJ stresses out that ‘PostFinance has never offered private banking or wealth management services to any of its customers. Instead, PostFinance engaged in basic consumer retail banking and payment services’.
PostFinance’s NPA states that since August, 2008, the institution maintained a total of 2,731 US-related accounts having a maximum aggregate value of approximately $290 million. PostFinance will pay a penalty of $2m.