Zuercher Kantonalbank, the biggest of Switzerland’s publicly-owned regional banks, said two current and one former employee were charged in the U.S. in a probe into tax evasion by some clients.
The bank can’t comment on the charges and continues to cooperate in the U.S. probe, Zurich-based ZKB said in a statement today.
Three client advisers for an unidentified Swiss bank were charged with conspiring to help U.S. clients hide more than $420 million from tax authorities, prosecutors have said. Stephan Fellmann, Otto Huppi and Christof Reist were each charged with a single count of conspiracy for allegedly helping at least 180 U.S. taxpayers maintain undeclared accounts at the bank. The charge carries a maximum term of five years in prison.
ZKB is one of at least 11 Swiss financial institutions investigated on suspicion of helping Americans hide money from the Internal Revenue Service. Switzerland has been in negotiations with the U.S. to resolve the probe and find a solution on treatment of undeclared bank accounts for almost two years. ZKB has exited business with American clients, it said in today’s statement.
Huppi is a U.S. citizen, according to a statement yesterday from the office of U.S. Attorney Preet Bharara in Manhattan. Huppi worked for ZKB before becoming a manager of Swiss American Advisors AG in Zurich, according to data in a Swiss commercial register.
All three live in Switzerland and haven’t been arrested, according to the U.S. prosecutors’ statement.
Markus Grieb, a director at Swiss American Advisors, said Huppi isn’t available for comment. An official for ZKB said the bank’s employees that were charged can’t comment.
More than two dozen foreign bankers, lawyers or advisers have been charged since 2008 in the U.S. crackdown on offshore tax evasion. Seven current or former Credit Suisse Group AG (CSGN) bankers were indicted last year. Prosecutors have also charged about 50 U.S. taxpayers.
UBS AG (UBSN), the largest Swiss bank, avoided prosecution by paying $780 million, admitting it helped Americans cheat on taxes and turning over data on secret accounts.
The three men opened and managed accounts at the unidentified bank for U.S. taxpayers, using codenames such as “Raincity” and “Kakeycat,” according to the U.S. attorney’s statement. Huppi also met with clients at a Newark, New Jersey, hotel to set up the undeclared accounts in Switzerland, according to the statement.
Fellmann told one of his American clients that the Swiss bank didn’t have offices in the U.S. and as such was less vulnerable to pressure from U.S. law enforcement authorities than UBS, according to the statement.
The case is U.S. v. Fellmann, U.S. District Court, Southern District of New York (Manhattan).
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