Credit Suisse Targeted in Tax Inquiry

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Credit Suisse said it has become a target of a Justice Department investigation into its private banking business.

The Swiss bank is one of several that the Justice Department and the Internal Revenue Service have been probing as part of a larger investigation into whether they helped U.S.-based clients hide their assets from taxation. The Swiss government agreed to disclose the identities of about 4,450 clients of UBS in 2009 after UBS signed a deferred prosecution agreement with the Justice Department under which it agreed to pay $780 million.

“As previously disclosed, Credit Suisse has been responding to requests for information, including subpoenas, in an investigation by the U.S. Department of Justice and other U.S. authorities,” the bank said Friday. “The investigation concerns historical Private Banking services provided on a cross-border basis to US persons. As part of this process, on July 14, 2011, Credit Suisse received a letter notifying it that it is a target of the DoJ investigation. It has been reported that the US authorities are conducting a broader industry inquiry. Subject to our Swiss legal obligations, we will continue to cooperate with the US authorities in an effort to resolve these matters.”

Other Swiss banks reportedly under investigation include Julius Baer and Basler Kantonalbank. Separately, Justice Department officials have broken off negotiations with their Swiss counterparts on a deal to settle the probe into the Swiss banking industry, according to a report in the Swiss newspaper SonntagsZeitung cited by Reuters.

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