gavel
olegdudko/123RF

Switzerland’s Banque Pictet & Cie SA has reached a deferred prosecution agreement with U.S. authorities for helping certain U.S. clients evade taxes.

The bank is paying US$122.9 million as part of the deal after it was charged for facilitating offshore tax evasion, enabling taxpayers to hide more than US$5.6 billion from the U.S. Internal Revenue Service, utilizing over 1,600 secret bank accounts, and evading approximately US$50.6 million in U.S. taxes.

According to U.S. authorities, the bank used a variety of tactics to help U.S. taxpayers hide assets, including secret offshore accounts, opening “insurance wrapper” accounts for taxpayers that are held in the name of insurance companies, and facilitating fictitious donations to help clients keep undeclared funds offshore.

‚ÄúToday, Banque Pictet et Cie admitted to actively helping U.S. taxpayers use coded accounts, foreign trusts and entities, nominee beneficiaries and other deceits to conceal their income and assets abroad,” said Stuart Goldberg, acting deputy assistant attorney general, in a release.

The settlement is the latest in a series of deferred prosecution deals with Swiss banks, stemming from tax evasion investigations that began back in 2008.

According to U.S. authorities, while Banque Pictet adopted measures to confirm that U.S. clients complied with the law, from 2008 through 2014, it also “assisted certain U.S. taxpayer-clients with Pictet Group accounts in evading their U.S. tax obligations and otherwise hiding undeclared accounts from the IRS.”

The financial sanctions are comprised of the US$52.2 million in gross fees that the bank earned on its undeclared accounts, US$31.8 million in restitution to the IRS, and a US$38.95-million penalty.

The U.S. Department of Justice said that the penalty reflects the bank’s extensive internal investigation, its cooperation with U.S. authorities, and the fact that it implemented remedial measures to protect against future tax evasion.

In a statement, Pictet said it’s “pleased to have resolved this matter and will continue to take steps to ensure its clients meet their tax obligations.”

The bank also noted that the deal with U.S. prosecutors acknowledged that it “began evaluating and enhancing its policies and practices for conducting business with U.S. taxpayer clients in 2008, before it became public that the DOJ was investigating similar issues at another Swiss bank.”

Pictet also stated that it took steps “to promote the tax compliance of its U.S. taxpayer clients.”