The holiday season saw no let-up in announcements around Swiss banks entering US deals to resolve issues of undeclared client accounts.

Switzerland’s Lombard Odier and DZ Privatbank (Schweiz) have reached resolutions with the US Department of Justice over tax evasion cases, together paying a total of more than $107 million in fines.

The banks are the latest institutions from Switzerland to settle matters with the DoJ under a program originally signed between the US and the Alpine state in 2013. To date, more than 75 organizations have signed non-prosecution agreements and paid fines totaling more than $1 billion.

Swiss banks eligible to enter the program were required to advise US authorities by December 31, 2013, that they had reason to believe that they had committed tax-related criminal offenses in connection with undeclared US-related accounts. Banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

Lombard Odier

The DoJ said in a statement that Lombard Odier opened and serviced accounts for US persons that it knew or had reason to know were likely not declared to the IRS or the Treasury Department. The venerable banking firm maintained at least 32 entity accounts that were operated without compliance with the requisite corporate formalities. The non-US jurisdictions in which the entities were incorporated or formed included the British Virgin Islands, Liechtenstein and Panama. In some instances, Lombard Odier referred clients to its Swiss-based affiliate, Favona SA, which is also part of the Lombard Odier Group, to set up entity structures. In addition, Favona provided administrative services, including accounting services and supplying corporate directors, the DoJ continued.

Since August 1, 2008, Lombard Odier had 1,121 US-related accounts, comprising maximum assets under management of approximately $4.45 billion, including assets of declared accounts. The bank will pay a penalty of $99.809 million.

DZ Privatbank

During much of the time after August 1, 2008, DZ Privatbank conducted a cross-border banking business that aided and assisted certain of its US clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the US government, the DoJ said. The bank offered traditional Swiss banking services that it knew could assist, and did assist, US clients in the concealment of assets and income from the IRS, the DoJ continued. These services included numbered accounts, the ability for customers to have their mail held at DZ Privatbank and the use of a post office box held in the name of a DZ Privatbank employee.

In 2008, DZ Privatbank decided to expand internationally, focusing on clients in countries including the UK, Hungary, Poland, Russia, Turkey and the US. DZ Privatbank opened 222 new US-related accounts with maximum aggregate assets under management of approximately $106 million between January 1 and October 31, 2009. Prior to that period, DZ Privatbank had approximately 110 US-related accounts with maximum aggregate assets under management of $133 million.

In May 2009, the bank began accepting customers from Credit Suisse who had either terminated their relationship with Credit Suisse or whom Credit Suisse had terminated.  Since August 1, 2008, DZ Privatbank accepted the transfer of more than two dozen US-related accounts from other Swiss banks under investigation by the department.

Since August 1, 2008, DZ Privatbank had a total of 691 US-related accounts with aggregated assets under management of approximately $498 million. DZ Privatbank will pay a penalty of $7.452 million.

The DoJ said both banks reduced the potential severity of punishments by encouraging US accountholders to comply with their US tax and disclosure obligations. While US accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.