(Bloomberg) Two Swiss banks agreed to pay combined penalties of about $8.3 million to avoid prosecution under a U.S. program that requires Swiss firms to say how they helped American clients avoid taxes.
Banque Pasche SA will pay $7.23 million and Arvest Privatbank AG will pay $1.04 million, the Justice Department said Thursday. Seventeen Swiss banks have paid $276.4 million this year in exchange for non-prosecution agreements. More than 100 Swiss firms entered the program at the end of 2013.
“Banque Pasche offered a variety of traditional Swiss banking services that it knew could and did assist U.S. taxpayers in concealing assets and income” from the Internal Revenue Service, the Justice Department said in a statement.
The Geneva-based bank allowed U.S. taxpayers to open accounts in the name of sham entities, held mail to minimize a paper trail and took assets from other Swiss banks under investigation, according to the government.
Arvest, based in Pfaffikon, stopped being a licensed Swiss bank on April 15, according to the statement.
Banks must disclose how they helped Americans skirt the law, describe who did so, and turn over detailed information on every U.S. account. Banks also must pay a penalty, but the size doesn’t reflect the extent of wrongdoing.
Rather, it turns on how successful the bank was in persuading American clients to hand over records showing they filed taxes on declared accounts or to voluntarily disclose undeclared accounts. The Justice Department typically lowers penalties as more clients provide records.
When clients don’t produce records, banks have paid penalties ranging from 20 percent to 50 percent of assets held, depending on when accounts opened. Because non-prosecution agreements don’t disclose how many clients turned over records or when accounts opened, it’s impossible to say why one bank paid more than another.
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