(Bloomberg) Schroders Plc’s Swiss bank will pay a $10.4 million penalty to avoid prosecution under a U.S. program that requires participating firms in Switzerland to say how they helped American clients avoid taxes.
Schroder & Co. Bank AG’s penalty is the fourth highest among 33 banks that have settled with the Justice Department this year after disclosing they may have committed tax-related crimes related to U.S. accounts. The banks have paid a combined $308.9 million to receive non-prosecution agreements.
The bank had 243 U.S.-related accounts totaling $506 million in 2008, according to the Justice Department.
“Swiss banks continue to lift the veil of secrecy surrounding bank accounts opened and maintained for U.S. individuals in the names of sham structures such as trusts, foundations and foreign corporations,” Larry J. Wszalek, acting deputy assistant attorney general in the Justice Department’s tax division, said in a statement Thursday.
London-based Schroders is the U.K.’s largest publicly traded asset manager by market value and has about 309.9 billion pounds ($473 billion) in funds under management. The Swiss bank is part of the firm’s wealth management business, which oversees 32 billion pounds in assets. The firm set aside 15 million pounds in March 2014 for a possible penalty.
Tax Reporting
“We have invested and will continue to invest considerable resources in systems to support the increasing demands of enhanced international tax reporting,” according to a bank spokeswoman.
Four bank employees traveled to the U.S. between 2004 and 2008 in connection with U.S. accounts, a practice that the firm banned after March 2009, according to a deal under which the firm won’t be prosecuted for disclosing past practices. The bank also handled large cash withdrawals on U.S. accounts, and in 26 instances account holders got cash or checks of $100,000 or more. In three cases, the amount exceeded $1 million.
More than 100 banks signed up for the disclosure program at the end of 2013, although some have dropped out. Justice Department officials say they expect to complete all the agreements by the end of the year.
In the program, banks must tell the Internal Revenue Service and Justice Department about accounts held by U.S. taxpayers, detail where money went when secret accounts were closed, and cooperate in treaty requests for information by the U.S. Authorities are using that information to build new cases.
“A significant element of the program is the highly detailed account and transactional data that has been provided to IRS specifically for law enforcement purposes,” Richard Weber, chief of the IRS criminal investigation division, said in a statement.
“We will continue to use this information to vigorously pursue U.S. taxpayers who may still be trying to illegally conceal offshore accounts,” he said.
—With assistance from Jeffrey Vögeli in Zurich and Sarah Jones in London.
