Credit Suisse Faces Fresh Heat Amid Israeli Tax Evasion Probe

Josh O'Neill

24 February 2017

Credit Suisse is reportedly the focus of a new wide-reaching investigation into whether its Israel unit helped clients evade taxes, less than three years after the Swiss bank's US arm paid billions and pleaded guilty to aiding tax evasion.

The latest probe could result in an indictment of the bank, penalties or a potential curtailing of some business, people familiar with the matter reportedly told the Wall Street Journal.

In July 2014, the US Department of Justice discovered that Dan Horsky, an American professor, was potentially hiding money overseas in his account managed by Credit Suisse's Israel desk. The revelation came two months after the bank pleaded guilty to aiding tax evasion and shelled out $2.6 billion to settle the case.

Within a year, Horsky was cooperating with the DoJ's investigation and helped build yet another case against Credit Suisse, people familiar with the matter reportedly said.

Investigators are reportedly determining whether other clients with dual Israeli citizenship also received help in hiding US tax obligations by using their Israeli or other personal documents, people familiar with the matter reportedly said.

Earlier this month, Horsky was sentenced to seven months' imprisonment and was ordered to pay fines that totalled more than $113 million.

The New York Department of Financial Services, which has the power to revoke Credit Suisse's US charter, has also began investigations into bank, one of the people reportedly said.

"Following our settlement in 2014, Credit Suisse continues to co-operate fully with the US authorities, working closely with the monitor appointed in conjunction with the NY DFS to identify individuals who may have sought to avoid their US taxation obligations," Credit Suisse said in an emailed statement.