Credit Suisse to pay €238 million fine in France to settle fraud probe and wait on other investigations to crystallise

The second largest Swiss bank agreed to pay the sum rather than be prosecuted for illegal canvassing of clients in France and aggravated tax fraud.

This follows

1. This month it agreed to pay $495 million (€504 million) to settle allegations it mis-sold mortgage-backed securities in the United States, the latest payout related to past blunders that have battered the bank’s reputation.
2. In June, the bank was convicted of failing to prevent money laundering by a Bulgarian cocaine trafficking gang, while a Bermuda court ruled that a former Georgian prime minister and his family were due damages of more than $600 million from Credit Suisse's life insurance arm, which the bank is appealing.
3. A similar case is pending in Singapore.
4. And the US Justice Department is also reportedly investigating whether Credit Suisse continued helping US clients hide assets from authorities, eight years after the Swiss bank paid a $2.6-billion tax evasion settlement.

According to a settlement approved on Monday, October 24, by a Paris court.

• Credit Suisse has agreed to pay €238 million ($234 million) to avoid prosecution on French money laundering and tax fraud charges,

The settlement will see Switzerland's second-largest bank

• Pay a fine of €123 million and
• Pay an additional €115 million in damages and interest to the French state.

Credit Suisse said it had reached the settlement

• "To resolve a legacy matter in relation to an investigation into historical cross-border private-banking services."

It added that

• "The settlement does not comprise a recognition of criminal liability."

French financial prosecutors opened a probe in 2016 and found that 5,000 French nationals had undeclared Credit Suisse accounts that were hiding €2 billion, according to the court.

The judge presiding over the settlement said that Credit Suisse bankers had prospected for clients in high-end French restaurants and hotels, avoiding the bank's offices in the country.

Prosecutor Francois-Xavier Dulin said the settlement took into account

• "The systematic character, lengthy period and creation of tools to hide" its prospecting of French clients between 2005 and 2012.

He said Credit

• Suisse had created offshore entities to aid clients to avoid declaring certain assets to French authorities.

Prosecutors added

• The settlement also took into account the bank's current cooperation and the corrective measures it undertook.

Credit Suisse said in its statement.

• "The bank is pleased to resolve this matter, which marks another important step in the proactive resolution of litigation and legacy issues,"

Other cases

1. This month it agreed to pay $495 million (€504 million) to settle allegations it mis-sold mortgage-backed securities in the United States, the latest payout related to past blunders that have battered the bank’s reputation.
2. In June, the bank was convicted of failing to prevent money laundering by a Bulgarian cocaine trafficking gang, while a Bermuda court ruled that a former Georgian prime minister and his family were due damages of more than $600 million from Credit Suisse's life insurance arm, which the bank is appealing.
3. A similar case is pending in Singapore.
4. The US Justice Department is also reportedly investigating whether Credit Suisse continued helping US clients hide assets from authorities, eight years after the Swiss bank paid a $2.6-billion tax evasion settlement.
   • Monday’s case began in 2016 and hit headlines the following year with raids in five nations — France, Germany, the Netherlands, the UK and Australia.
   • Dutch authorities said after the raids that the tip that sparked the investigation came from one or more informers.
   • The case is similar to another probe in France into local rival UBS Group that culminated last year in penalties worth €1.8 billion for the Swiss bank. UBS has lodged a further challenge to try to overturn the finding at France’s top court. — Reuters / Bloomberg

Sources

https://www.irishtimes.com/business/financial-services/2022/10/24/credit-suisse-settles-french-tax-probe-for-238m/

https://www.lemonde.fr/en/economy/article/2022/10/24/credit-suisse-to-pay-238-million-fine-in-france-to-settle-fraud-probe_6001556_19.html#:~:text=Credit%20Suisse%20has%20agreed%20to,24%2C%20by%20a%20Paris%20court