The founder of a Swiss trust pleaded guilty to helping Americans evade taxes and said Credit Suisse Group AG (CSGN) was involved in the scheme, adding to pressure on the bank as it tries to resolve a U.S. criminal probe.
Josef Dorig, 72, said in federal court in Alexandria, Virginia, that he helped the banks U.S. clients cheat the Internal Revenue Service by hiding the owners of accounts through phony trusts and foundations. He was indicted in 2011 with seven Credit Suisse bankers on a charge of conspiring to hide $4 billion from the IRS. The U.S. told Credit Suisse then that it was a target of the probe.
Dorig is cooperating with prosecutors probing Zurich-based Credit Suisse, the largest of 14 Swiss banks under U.S. criminal investigation amid a crackdown on offshore tax evasion. The bank has said its trying to negotiate a resolution with the U.S. Former Credit Suisse banker Andreas Bachmann, who pleaded guilty on March 12, also is cooperating in the probe.
Todays plea further pulls back the curtain on efforts by Swiss banks to help U.S. taxpayers evade taxes through the use of sham trusts and foundations, Deputy Attorney General James Cole said in a statement.
Dorig, who worked at Credit Suisse or its units from 1961 to 1997, helped set up structures like foundations, trusts and companies. They supposedly owned accounts which were actually controlled by U.S. clients, he said.
In 1997, the subsidiary where he worked spun off the structures linked to undeclared accounts to a new trust company controlled by Dorig. Credit Suisse bankers then referred U.S. clients seeking to avoid domestic taxes to Dorig Partner AG. Despite the obfuscation, Credit Suisse recorded the real owners of accounts, Dorig said.
It was Dorigs role to create a paper trail that made it appear the structure operated independently and the U.S. person who owned the assets in the undeclared account linked to the structure had no control over the assets, according to a 17-page statement of facts. In truth, Dorig regularly acted at the direction of the U.S. person who owned the assets.
Dorig implicated several bankers under indictment, including Markus Walder, former head of North American offshore banking; Susanne Ruegg-Meier, a former member of senior management in cross-border banking; and Roger Schaerer, who worked in the banks New York office and was a senior manager. They have not responded to the 2011 indictment.
Dorig, a citizen of Switzerland and Italy, said he went to Miami, Beverly Hills, California, and other U.S. cities with Credit Suisse bankers to help U.S. clients set up the structures. After he set up the structures, clients visited Credit Suisse bankers in Zurich for cash. Between 2004 and 2008, one client took out $30,000 in cash on one trip, $11,000 on another, $50,000 on a third, and then $55,000, Dorig said.
Walder and Ruegg-Meier signed a contract in 2005 that required Dorig to pay a referral fee to Credit Suisse for clients. The bank terminated the deal in 2008, when Walder told him the bank would no longer maintain undeclared accounts. At that point, the U.S. was stepping up its offshore crackdown.
Originally posted here:
Credit Suisse Pressure Increases With Enablers Plea