US files criminal complaint against Credit Suisse

http://www.cnbc.com/id/101614446

by us0r • 12 years ago

52 36 12 years ago

I found that as these headlines from bloomberg and other financial news apps started to roll in to my phone and now that I've actually read a few of the articles that my reaction of 'let the wrist slaps begin' may not be the reality of the situation.

rhizome• 12 years ago

I imagine we're going to see a trickle of these things over the next 6months leading up to US midterm elections, but there's still nothing on HSBC laundering money for terrorists.

us0r2• 12 years ago

Wasn't there a settlement for deferred prosecution or whatever its called? (be good boys for 2-3 years)?

charonn02• 12 years ago

Yes, and that's the problem: HSBC avoided criminal charges.

[0] http://www.rollingstone.com/politics/blogs/taibblog/outrageo...

higherpurpose• 12 years ago

I'm sure this time they'll go much further - maybe up to $3 billion in settlement!

EDIT: I posted the above before reading the article, and looks like I was pretty spot on (although maybe too aggressive for Holder's taste). Holder's DoJ is becoming so predictable. Don't expect him to put any serious banker in prison in his time.

tenpoundhammer• 12 years ago

I believe that the big win here is the 'Monitor'. Having it publicly that one of the worlds largest tax havens has agreed to have a monitoring like functionality employed is a huge hit to the entire tax evasion industry. It will(should) make large tax evaders worried that other banks are doing the same thing without public notification, as parts of other plea deals.

This monitoring thing, could be a significant deterrent and informant.

This kind of thing is especially problematic for the types of wealthy that have to worry about public opinion, politicians and employees of publicly traded or well known companies etc.

downandout2• 12 years ago

I'm not sure it's a "win". The reality is that this will quickly drive business away from one of Switzerland's largest banks. As a result, the Swiss will start going back to their old policies and their cooperation in recent years will cease. It is for this reason that they have only brought civil charges in the past.

Eric Holder appears to be out of his depth on this one. All this did was reopen one of the world's largest tax havens.

us0r2• 12 years ago

From a few years ago but I found this quite interesting. This guy earned $2.5 million per month in prison. He probably had no idea:

"Sentenced to a 40-month federal prison term in 2009 for his role in a tax evasion conspiracy involving offshore American accounts, former Swiss banker Bradley Birkenfeld elicited sympathetic comments from some observers who said the hefty sentence was likely to discourage other whistleblowers from cooperating with the government."

"But the former UBS AG employee's situation has recently taken a significant turn for the better. Now 47 and out of prison, he is to receive a $104 million Internal Revenue Service whistleblower award for his work in helping the feds pursue over $5 billion in unpaid taxes on unreported assets at Zurich-based UBS and other offshore banks"

http://www.abajournal.com/news/article/ex-banker_birkenfeld_...

Frozenlock• 12 years ago

I believe this is a big loss.

Exactly for the reasons you stated.

Funny, isn't it?

mindcrime2• 12 years ago

I don't see that as a "win" for anybody, unless you count the IRS as "somebody" (I don't).

jonathankoren2• 12 years ago

I don't understand this sentiment. We need roads. We need cops. We need schools. We need things. As a society, we pay for these things through taxes. When you don't pay your taxes, you're stealing from all of us. Even someone that despises taxes, can understand the free rider problem.

sexmonad• 12 years ago

Can someone explain to me how the US has jurisdiction over Credit Suisse? I see how they could have gone after the individual tax fraudsters (American citizens), but how can they police foreign banks?

diogenescynic• 12 years ago

They are foreign banks operating in the United States, so they have to also obey US laws.

seanmcdirmid• 12 years ago

Not only that, but if they want to conduct business with American banks, or just hook into the system, they are subject to certain pressure from the US government. E.g. dealing with Iran or DPRK is a nono.

dragonwriter• 12 years ago

Can someone explain to me how the US has jurisdiction over Credit Suisse?

Because the US is a sovereign state, which means they have jurisdiction over whatever they choose to have jurisdiction over, subject to constraints forcibly imposed by outside parties.

I see how they could have gone after the individual tax fraudsters (American citizens), but how can they police foreign banks?

The US government (even ignoring extraordinary action it could take outside of the US or with the cooperation of foreign governments) can effectively impose penalties on any entity that does business in the United States, or holds assets in the United States.

cube13• 12 years ago

Or because they have branches and accounts in the US:

https://www.credit-suisse.com/us/en/

aestra• 12 years ago

impose penalties on any entity that does business in the United States, or holds assets in the United States.

Or even does business with US citizens.

whoismua• 12 years ago

What others said (operate in US = must obey US laws0 AND the fact that they can freeze out any bank out of the US financial industry.

charonn02• 12 years ago

IANAL but I think the alternative for Credite Suisse is to stop doing business with the US and US-based companies.

sdfjkl• 12 years ago

Obligatory mention of Brin's "Helvetian War": http://davidbrin.blogspot.co.uk/2012/08/will-worlds-middle-c...

jonathankoren2• 12 years ago

25.5 billion in revenues last year.

jevgeni2• 12 years ago

Revenues mean sweet FA. You want to look at the profits, and those were around 2 billion.

8ig8• 12 years ago

Will anyone do jail time? I wonder.

InclinedPlane2• 12 years ago

Of course not. If an individual evades taxes or launders drug money they can expect harsh penalties in criminal court, or jail time. If a multi-billion dollar international bank does it then nobody will go to jail and at best only a fine will result.

jevgeni2• 12 years ago

As far as I know, Credit Suisse didn't evade taxes, that they as a corporation had to pay. What they did, was help American individuals evade taxes in the US.

And the bank isn't even based in US, but in Zurich. As far as I know, they only have their investment banking arm in New York.

So what the US government is doing here is a) converting the attractiveness of the American market into cash for the government (which might be kinda OK, I dunno) and b) using their control of dollar settlements to bully foreign banks into following the US law (which is a somewhat dick move).

azinman2• 12 years ago

From NYTimes [1]: “This case shows that no financial institution, no matter its size or global reach, is above the law,” the United States attorney general, Eric H. Holder Jr., said at a news conference on Monday."

Except even in this criminal case... let's bend the law and not put anyone in jail, revoke the bank's license to operate or its license to invest, or make them hand over the names of the Americans that they aided in committing criminal acts. So basically every real repercussion that is already mandated by law... nah let's skip all that. Or try to find the guilty Americans who are already rich and powerful and now getting away with it while the bank get's a PURPOSELY recoverable slap on its wrist. Basically their stock will go down for a bit, until they have some good quarters, and a couple people get fired.

There's a reason "Occupy Wall Street" caught on as a slogan.

[1] http://dealbook.nytimes.com/2014/05/19/credit-suisse-set-to-...

gretful• 12 years ago

Crash the economy, get a bailout, help people dodge taxes, go to jail. OK, long as we know what you're priorities are, Uncle Sam!

US files criminal complaint against Credit Suisse

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