(Bloomberg) Julius Baer Group Ltd., Switzerland’s third- largest wealth manager, said it expects to pay about $547 million to settle a U.S. investigation into how it helped Americans evade taxes, clearing the way for other Swiss banks to resolve similar criminal probes.
The bank reached an agreement in principle with the U.S. Justice Department, the bank said in a statement on Wednesday, as it earmarked another $197 million beyond the $350 million it set aside in June to resolve the probe. The Zurich-based company expects to conclude the agreement of the four-year investigation in the first quarter.
The bank’s shares rose on the news.
The announcement came as the Justice Department concludes a disclosure program in which about 75 Swiss banks have avoided prosecutions this year by paying more than $1 billion and disclosing how they helped U.S. clients cheat the Internal Revenue Service. Lawyers defending banks have said the Justice Department wouldn’t resume prosecutions of Swiss banks until it completed the program.
About a dozen Swiss banks have been under U.S. criminal investigation since Switzerland’s largest lender, UBS Group AG, settled with the U.S. UBS agreed in 2009 to pay $780 million, while Credit Suisse Group AG, the No. 2 Swiss bank, paid $2.6 billion in 2014. Both admitted they helped Americans cheat the IRS.
Those still under investigation include the Swiss unit of HSBC Holdings Plc, Europe’s biggest bank.
“Julius Baer remains committed to cooperating proactively with the DOJ’s investigation,” the company said in the statement. Jan Vonder Muehll, a spokesman for the bank, declined to comment further by telephone.
Chief executive officer Boris Collardi had said he wanted to resolve the U.S. probe by the end of 2015. Uncertainty around the Justice Department investigation has hampered the company’s ability to make deals, invest in renewing outdated information- technology platforms and even return capital to shareholders. Julius Baer said in July it planned to outline a new capital- management plan in early 2016.
U.S. authorities have been aided in their investigations by 54,000 U.S. taxpayers who disclosed offshore accounts to the IRS since 2009, paying more than $8 billion in back taxes, penalties and interest, according to the Justice Department.
More than three dozen offshore bankers, lawyers and advisers have also been charged. They include Daniela Casadei and Fabio Frazzetto, two Julius Baer bankers who were indicted in New York in 2011. They were accused of conspiring with more than 180 U.S. clients and others at the bank to hide at least $600 million in assets from the IRS.
Casadei worked at the bank from the early 1990s through 2010, and Frazzetto worked there from 2005 until 2010, according to the indictment. Both men, who live in Switzerland, are charged with conspiracy and face as long as five years in prison.
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access