Another group of Swiss banks have entered agreements with US authorities over secret accounts, paying fines. To date, 75 banks have reached deals, paying more than $1 billion of fines.

A group of five Swiss banks have signed resolutions with US authorities over their provision of secret accounts for US citizens, which means 75 banks from the Alpine state have now reached agreements, paying a total of $1 billion in fines.

Yesterday, the Department of Justice said that Bank J Safra Sarasin (Safra Sarasin), Coutts & Co Ltd (Coutts), Gonet & Cie (Gonet) and Banque Cantonal du Valais (BC Valais) reached resolutions under the department’s Swiss Bank Program.  These banks collectively will pay penalties of more than $178 million, the DoJ said in a statement. Separately, Banque Cantonale Vaudoise also announced yesterday that it had signed a non-prosecution agreement and paid fines to US authorities for holding secret accounts of US persons. BCV said it will pay a settlement of $41.7 million.

The Swiss Bank Program, announced in August 2013, is designed to allow Swiss banks to resolve potential criminal liabilities in the US. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the programme, however.

Explaining the latest cases, the DoJ said Safra and Sarasin each entered into a Qualified Intermediary Agreement with the Internal Revenue Service.  The QI regime provided a comprehensive framework for US information reporting and tax withholding by a non-US financial institution with respect to US securities. After signing their respective QI Agreements, Safra and Sarasin continued to service certain US customers without disclosing the customers’ identity to the IRS and without regard for the impact of US criminal law on that decision, the statement said.

Since 1 August, 2008, Safra Sarasin had 1,275 US-related accounts with an aggregate maximum value of approximately $2.2 billion.  Safra Sarasin will pay a penalty of $85.809 million, the DoJ said.

Turning to Coutts, the DoJ said the bank “opened, serviced and profited from accounts for US clients who Coutts knew or had reason to know were likely not complying” with reporting obligations.  “Since August 2008, Coutts has accepted over $150 million in inflows from other Swiss banks that were being investigated by the department, and Coutts opened 465 accounts for US clients, some of whom did not comply with their obligations regarding US tax or Reports of Foreign Bank and Financial Accounts”, the DoJ said.

Since 1 August, 2008, Coutts held and managed 1,337 US-related accounts, which included both declared and undeclared accounts, with a peak of assets under management of approximately $2.1 billion.  Coutts will pay a penalty of $78.484 million.

In the third case, the DoJ referred to Gonet, a family-owned private bank headquartered in Geneva.  Gonet operates a branch office in Lausanne, Switzerland, which was opened in 2011, and a representative office in Abu Dhabi, United Arab Emirates, which was opened in 2014.  In 1982, Gonet opened a subsidiary in Nassau, Bahamas, which offers traditional private banking services.  In 2008, Gonet acquired a minority interest in an entity in Monaco, and three years later Gonet established a subsidiary in Singapore.  In 2014, Gonet sold the entities in Monaco and Singapore.

“Gonet enabled some US taxpayers to evade their US tax and filing obligations, resulting in the filing of false income tax returns with the IRS and allowing US taxpayers to hide offshore assets from the IRS.  Gonet opened accounts for U.S. taxpayers who had left other Swiss banks that were known targets of investigations by the department, including UBS and Credit Suisse,” the DoJ said.

“With respect to the majority of these accounts, Gonet knew or should have known that the beneficial owners were attempting to evade US taxes and foreign account reporting requirements.  Gonet also opened and maintained a number of US-related accounts held by non-US entities with the knowledge that US persons were the true beneficial owners of the assets maintained in the accounts,” the DoJ said.

Since 1 August, 2008, Gonet held 150 US-related accounts with an aggregate maximum balance of approximately $254.5 million.  Gonet will pay a penalty of $11.454 million.

The fourth bank in the DoJ statement is BC Valais, a bank founded in 1917 and  headquartered in the Canton of Valais.  Since 1 August, 2008, BC Valais maintained 185 US-related accounts with a maximum aggregate value of approximately $72 million.  BC Valais will pay a penalty of $2.311 million.