UBS to Pay for CS Agreement to End US Tax Probe

UBS to Pay for CS Agreement to End US Tax Probe

The now-defunct Credit Suisse has made an agreement with the US Department of Justice to end a tax investigation related to American clients. UBS will foot the bill.

Credit Suisse has entered into an agreement with the US Department of Justice (DOJ) to settle a tax investigation into its implementation of a 2014 plea related to its legacy cross-border business with American clients in Switzerland, according to a statement.

The now-defunct Swiss bank pleaded guilty to one count of conspiracy to aid and assist in the preparation of false income tax returns and also entered into a non-prosecution agreement regarding US taxpayers booked in its Singapore booking center. UBS will foot the bill, paying nearly $511 million to the DOJ.

Second Quarter Charge

According to UBS, it will record a charge in the second quarter in relation to the latest resolution. It also expects to recognize a credit from the partial release of the contingent liability established with the acquisition of Credit Suisse.

«UBS was not involved in the underlying conduct and has zero tolerance for tax evasion,» the bank said. «With this resolution, UBS is pleased to have resolved another of Credit Suisse's legacy issues, in line with UBS’s intention to resolve legacy matters at pace in a fair and balanced way and in the best interest of all its stakeholders.»

Over $4 Billion Hidden

After reaching a plea agreement with the US in 2014 for aiding US customers to conceal the ownership and control of assets, Credit Suisse held undeclared accounts for Americans in Singapore with assets totaling over $2 billion, according to a separate statement by the US DOJ. The latest agreement involves a guilty plea for conspiring to hide more than $4 billion from the Internal Revenue Service in at least 475 offshore accounts.

«In 2023, during the post-merger of UBS AG Singapore and Credit Suisse AG Singapore, UBS became aware of accounts held at Credit Suisse AG Singapore that appeared to be undeclared US accounts. UBS froze some of the accounts, voluntarily disclosed information about those identified accounts to the Justice Department and cooperated by undertaking an investigation into the identified accounts,» the DOJ added.