Cornèr Banca SA Reaches Resolution with DOJ Under Swiss Bank Program

On December 10, 2015 Corner Banca SA (Cornèr) reached a resolution with the United States Department of Justice (DOJ) under the Swiss Bank Program.  This resolution, along with the Bank Coop AG (Bank Coop) resolution which was entered into on the same day, brings the total number of financial institutions executing non-prosecution agreements under the Swiss Bank Program to total of 61. 

Announced on August 29, 2013, the Swiss Bank Program offers Swiss banks not currently under investigation by the DOJ the opportunity to resolve potential criminal liabilities with the federal government.  Banks meeting the program’s eligibility criteria are allowed to voluntarily come forward to report actions they have taken to assist U.S. citizens in hiding their accounts and evading their tax obligations.

When an eligible financial institution complies with all of the program’s conditions the institution can enter into a non-prosecution agreement (NPA) with the DOJ to escape potential criminal prosecution.  The NPA sets forth the monetary penalty that must be paid to the DOJ along with specific requirements that the bank must meet, including making a complete disclosure of cross-border activities and providing detailed information on accounts that U.S. taxpayers have direct or indirect interests in.

Cornèr Resolves Tax-Evasion Claims

Headquartered in Lugano, Switzerland, Cornèr has two wholly owned affiliates: Cornèr Banque (Luxembourg) SA, and Cornèr Bank (Overseas) Ltd.  According to the Department of Justice, Cornèr helped U.S. clients to shield their foreign assets from the Internal Revenue Service, evade their tax obligations, and file false tax returns with the IRS.  Cornèr has been accused of establishing and servicing accounts that the bank knew were not likely to be reported to the Internal Revenue Service or the U.S. Department of Treasury.  The bank was also accused of maintaining correspondent accounts with a U.S. bank in order to facilitate certain transactions involving U.S.-related accounts.

In August 2008 Cornèr’s executive board decided they would no longer accept any new U.S. clients coming from UBS.  Despite this decision, Cornèr did accept new U.S.-related accounts from UBS, which the bank had reason to know involved some undeclared accounts.  Cornèr also took  steps to help U.S. clients shield their assets and income from the IRS, such as giving clients the option to use mail-hold agreements and to request numbered accounts, including code-name accounts.  Additionally, Cornèr maintained U.S.-related accounts beneficially owned by U.S. persons that were held in the names of structures, even though it knew or had reason to know that U.S. clients were using these structures to shield their identities from the IRS.

In order to avoid potential criminal prosecution, Cornèr entered into a non-prosecution agreement with the DOJ.  According to the terms of the NPA, Cornèr must pay a penalty of $5.068 million along with meeting all other program requirements.

The Swiss Bank Program has enticed many financial institutions looking to escape criminal prosecution to turn their backs on their clients and give information about their offshore accounts to federal authorities in the United States.

If you have undeclared offshore accounts and are concerned that your bank already has or is likely to enter into an agreement with the U.S. government,  you should discuss your situation with an experienced Maryland international tax attorney.   A tax lawyer in the Maryland office of Thorn Law Group can carefully review your case to help you determine the best way to address your offshore account concerns. Contact us today.