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Senate panel: Credit Suisse abetting U.S. tax evasion

Sen. Carl Levin (D-Mich.), with Sen. John McCain

Sen. Carl Levin (D-Mich.), with Sen. John McCain (R-Ariz.) at left, speaks to reporters in Washington yesterday about allegations concerning Swiss bank Credit Suisse. Credit: MCT / Kevin G. Hall

Billions of dollars in U.S. taxes are going unpaid because Americans are exploiting Swiss bank accounts, and the U.S. government has failed to aggressively pursue Switzerland's second-largest bank, a Senate investigation has found.

The bank, Credit Suisse, has provided accounts in Switzerland for more than 22,000 U.S. clients totaling $10 billion to $12 billion, according to a report issued yesterday by the Senate Permanent Subcommittee on Investigations. The U.S. government has received only 238 names of U.S. citizens with secret accounts at Credit Suisse, or just 1 percent of the estimated total, the investigation concluded.

Credit Suisse recruited U.S. clients to open Swiss accounts from 2001 through 2008, helped them conceal the accounts from the Internal Revenue Service and enabled misconduct by bank employees, the subcommittee asserted.

For five years the Senate panel has been examining Swiss banks' use of secrecy laws to enable tax evasion by Americans. The main focus of its latest report was Credit Suisse.

Credit Suisse had no immediate comment on the Senate report.

Responding to the report in a statement, the Justice Department said it is investigating up to 14 Swiss financial institutions, "and we won't hesitate to indict if and when circumstances merit." It did not name the banks.

The report alleged cloak-and-dagger tactics were used by Credit Suisse bankers who were said to travel to the United States to secretly service accounts and recruit customers -- including at golf tournaments in Florida and the annual "Swiss Ball" in New York.

Over breakfast at a hotel, one banker handed a U.S. customer bank statements hidden in a Sports Illustrated magazine, the report said. The bank filed visa applications for employees that falsely portrayed them as tourists and maintained a New York office with lists of middlemen who set up offshore shell companies for some U.S. customers, the committee asserted.

Credit Suisse "aided and abetted U.S. tax evasion, not only from behind a veil of secrecy in Switzerland, but also on U.S. soil by sending Swiss bankers here to open hidden accounts," Sen. Carl Levin (D-Mich.), the subcommittee's chairman, said at a news conference Tuesday.

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