US prosecutors are accusing Swiss bank Julius Baer of helping more than 400 Americans hide undeclared money from the taxman, according to a ruling made public by a Swiss court.
The 34-page ruling, which paraphrased an IRS (Internal Revenue Service) request for judicial aid and did not provide supporting documents, is the fullest public picture so far of the case against Julius Baer, one of a dozen Swiss banks that are the subject of a criminal investigation in the United States into tax evasion. Julius Baer declined to comment.
According to the Swiss ruling, US tax authorities alleged at least 400 Americans hid more than $600 million (CHF545 million) from the IRS. Julius Baer private bankers used «codenames and numbers», as well as «travelling account statements», to conceal the identity of the account owners, the court document stated on Wednesday.
The bank also advised wealthy Americans to use «sham corporate entities» to hide their money and ensured that bank correspondence wouldn’t be sent to them in the United States in order to avoid detection, the court said, citing the IRS judicial aid request.
Julius Baer told clients they were safe from IRS prying because the Swiss bank didn’t have a US office, unlike larger rivals such as UBS, according to the court documents.
‘Eager to settle’
Baer has in the past said it is cooperating with US authorities, is eager to settle, and that it has handed over documents and other material illustrating its business in the United States.
The Swiss court said the IRS pieced together the information from the indictment in 2011 of two former Julius Baer private bankers, as well as from voluntary disclosures from more than 400 one-time clients of the Swiss bank who admitted to their hidden accounts.
The two former private bankers helped wealthy American clients of Julius Baer hide roughly $600 million in assets in secret Swiss bank accounts that went undeclared to the IRS, according to the 2011 indictment.
The details of the US case against Baer came to light through a ruling backing an appeal by two clients of the bank. The court ruled the couple’s bank account data must not be disclosed to US tax authorities, because the IRS had not provided enough detail to warrant judicial assistance from Switzerland.
A host of Swiss banks not being targeted last month signalled their readiness to work with US officials in the crackdown on wealthy Americans evading taxes.