Thursday, August 8, 2019
On August 5, 2019, the United States Department of Justice announced that Swiss bank LLB Verwaltung (Switzerland) AG has agreed to pay a penalty of USD10.6m to resolve a case in which it was accused of helping US clients to conceal income.
The DoJ said that, according to the statement of facts agreed by the parties, LLB-Switzerland (formerly known as Liechtensteinische Landesbank (Schweiz) AG) and some of its employees, including members of the bank's management, conspired with a Swiss asset manager and US clients to conceal those US clients' assets and income from the Internal Revenue Service. This was done through various arrangements, including using nominee companies set up in low tax jurisdictions, the DoJ said.
According to the DoJ, at its peak, LLB-Switzerland had approximately one hundred US clients holding nearly USD200m in assets, with the majority of those accounts in the names of nominee entities.
LLB-Switzerland delegated to a Swiss asset manager the authority to prepare account opening and "know your customer" (KYC) documents.
The DoJ said that LLB-Switzerland's remediation efforts since 2012 "have been comprehensive," with the entity having halted and terminated all US cross-border business with US clients. Managers and employees implicated in the Department's investigation were dismissed. Furthermore, the operations of LLB-Switzerland have been shut down and its banking license returned to the Swiss Financial Market Supervisory Authority.
According to the terms of the non-prosecution agreement, in addition to paying a penalty, LLB-Switzerland has agreed to cooperate in any related criminal or civil proceedings in return for the Department's agreement not to prosecute the company for tax-related criminal offenses committed by LLB-Switzerland.