Swiss-based Schroder & Co. Bank has reached resolution with the US Department of Justice (DoJ) over the tax evasion cases under the department’s Swiss bank programme.
The bank has agreed to pay $10.3m penalty to the US to avoid prosecution over allegations that it may have helped US citizens avoid paying taxes.
Under the non-prosecution agreement, the bank agreed to cooperate in any related criminal or civil proceedings and demonstrate implementation of controls to prevent misconduct.
The US DoJ in a statement said Schroder Bank held a total of 243 US-related accounts with approximately $506m in assets since 1 August 2008.
The department added that the bank opened accounts for trusts and companies established under the laws of the British Virgin Islands, the Cayman Islands, Panama, Liechtenstein and other non US jurisdictions, where the beneficiary or beneficial owner named on the Form A was a US citizen or resident.
The bank also handled cash withdrawals on US accounts, and 26 US related accountholders received cash or checks of $100,000 or more on closure of their accounts including at least three cases cash or checks in excess of $1m.
Additionally, Schroder Bank is planning to cease operations of its two wholly owned subsidiaries, Schroder Trust AG and Schroder Cayman Bank & Trust Company.
Department of Justice’s tax division acting deputy assistant attorney general Larry Wszalek said: "As today’s agreement reflects, 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.
"The department’s prosecutors and the IRS are actively following these leads to criminally investigate and prosecute those individuals who willfully evaded or assisted in the evasion of U.S. income tax obligations."