Swiss Bank Credit Suisse pleaded guilty on Monday to federal charges levied against them for allowing some U.S. clients to evade their taxes. According to General Eric Holder, the bank “engaged in an extensive and wide-ranging conspiracy to help U.S. taxpayers evade taxes.” For decades up until 2009, the bank operated an illegal cross-border banking business that helped thousands of clients conceal their income from the IRS. Although the bank pleaded guilty, Credit Suisse has yet to release the names of the clients who allegedly used the bank to hide money from the IRS.
The bank is now expected to pay a total of $2.6 billion to the U.S. Department of Justice, Internal Revenue Service, Federal Reserve, and New York State Department of Financial Services. They have also agreed to make fundamental changes to their business practices. This rare criminal indictment for a major financial institution marks a huge change in the United States Justice Department. In the past, the Justice Department has not pursued convictions against large banks for fear that it would destabilize financial firms and markets. This is the start to lawmakers putting pressure on banks.
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