Geneva-based private bank Pictet Group has agreed to pay $122.9 million to settle charges with the U.S. Justice Department that it helped Americans evade taxes by hiding more than $5.6 billion in secret accounts.
Pictet admitted to conspiring to defraud the United States by opening and maintaining undeclared accounts for U.S. clients and concealing their assets from the Internal Revenue Service (IRS). The bank also admitted to failing to register as a foreign financial institution under the Bank Secrecy Act (BSA).
“Today’s settlement holds Pictet accountable for its years-long scheme to help wealthy Americans evade their taxes,” said Deputy Assistant Attorney General Richard E. Zuckerman. “Pictet’s conduct was egregious and demonstrated a blatant disregard for U.S. tax laws and financial regulations.”
The settlement is the latest in a series of enforcement actions taken by the Justice Department against Swiss banks that have helped Americans hide assets from the IRS. In recent years, the Justice Department has reached settlements with UBS AG, Credit Suisse Group AG, and Wegelin & Co. for their roles in facilitating tax evasion by U.S. clients.
As part of the settlement, Pictet has agreed to cooperate with the Justice Department’s ongoing investigations into offshore tax evasion. The bank has also agreed to implement a series of compliance measures to prevent future misconduct.
“This settlement sends a strong message that banks that help U.S. taxpayers evade taxes will be held accountable,” said Zuckerman. “The Justice Department is committed to ensuring that all taxpayers, regardless of their wealth or status, pay their fair share of taxes.”
Impact on the Banking Industry
The settlement with Pictet is a significant development for the banking industry. It is the largest settlement ever reached with a Swiss bank for tax evasion and is likely to have a chilling effect on the use of offshore accounts to hide assets from the IRS.
The settlement also underscores the importance of banks complying with U.S. tax laws and financial regulations. Banks that fail to comply with these laws can face significant penalties, including criminal charges.
The Justice Department’s ongoing investigations into offshore tax evasion are likely to continue to have a significant impact on the banking industry. Banks that are found to have helped U.S. taxpayers evade taxes can expect to face similar penalties to those imposed on Pictet.
The settlement with Pictet is a major victory for the Justice Department in its efforts to combat offshore tax evasion. The settlement is likely to deter other banks from engaging in similar misconduct and to encourage U.S. taxpayers to come forward and pay their taxes.