RiskTech Forum

Societe Generale Unit Joins Other Banks In U.S. Tax Evasion Pact

Posted: 1 June 2015  |  Source: GARP

A unit of Societe Generale SA based in Switzerland and three other banks agreed to pay a total of $2.2 million in penalties for helping American clients avoid taxes.

The settlement comes under a U.S. program that lets Swiss banks avoid prosecution if they agree to cooperate with prosecutors and disclose their tax-avoidance methods. Other banks are negotiating similar accords.

MediBank AG, LBBW AG and Scobag Privatbank AG will pay a total of almost $1 million in penalties, the U.S. Justice Department said Wednesday. Societe General Private Banking, based in Lugano, will pay $1.36 million.

Societe Generale Private Banking helped U.S. customers conceal assets and income from the Internal Revenue Service, according to the Justice Department. Some U.S. taxpayers expressly instructed SGPB-Lugano not to disclose their names to the IRS, to sell their U.S. securities and to not invest in U.S. securities, which would have required disclosure and withholding, according to the announcement.

Bank employees served as officers of “sham entities,” and created “transitory” accounts to shield identities and account numbers, the Justice Department said.

Laetitia Maurel, a spokeswoman for Societe Generale, didn’t immediately respond to an e-mail after regular business hours seeking comment.

Similar agreements were reached by Finter Bank Zurich, Vadian Bank AG and BSI SA earlier this year.

The non-prosecution agreements aren’t available to a dozen Swiss banks under criminal investigation. Credit Suisse Group AG’s main bank subsidiary pleaded guilty last year and paid a $2.6 billion fine.