WASHINGTON Feb 25 The U.S. Justice Department
is dragging its feet on prosecuting Swiss banks that helped
Americans evade taxes and on collecting billions of dollars
likely owed to the U.S. Treasury by tax dodgers, a powerful U.S.
Senate panel said on Tuesday.
Five years after Switzerland's largest bank, UBS AG
, admitted to helping U.S. taxpayers hide money from
tax authorities and agreed to provide information about its
clients, federal officials have gotten only a handful of names
from other Swiss banks, the Senate Permanent Subcommittee on
Chaired by Democrat Carl Levin, the panel issued a report
alleging misdeeds by Credit Suisse, Switzerland's
second-largest bank. The report said Credit Suisse opened Swiss
accounts for more than 22,000 U.S. customers with combined
assets of as much as $12 billion.
With cash-strapped governments worldwide tightening
international tax law enforcement, the Levin report and a public
hearing on it slated for Wednesday will put pressure on the
Justice Department to conclude its long-running probe of Credit
Suisse, but the two are not yet in agreement over a resolution,
a person familiar with the matter said.
"There's no number on the table... There's no indication
that there's any finality in any discussions," said the person,
who declined to be named.
Credit Suisse last week agreed to pay $196 million and admit
to wrongdoing to settle related charges leveled by the
market-regulating U.S. Securities and Exchange Commission.
A Justice Department official said its investigation was at
an advanced stage but declined to provide details. In a
statement, the agency said it has charged 73 account holders and
35 bankers and advisers related to offshore tax evasion since
2009, and is investigating 14 Swiss financial institutions.
"We won't hesitate to indict if and when circumstances
merit," the department said.
A Credit Suisse representative had no immediate comment.
DETAILS FROM 176-PAGE REPORT
The Senate subcommittee, known for long and detailed probes
of financial misconduct, has been examining tax evasion for many
years and held hearings on UBS in 2008 and 2009.
Four top Credit Suisse executives, including Chief Executive
Brady Dougan, are scheduled to testify on Wednesday, along with
two top Justice Department officials.
Ahead of the hearing, Levin told reporters at a briefing:
"Credit Suisse's practices facilitated tax evasion against the
United States ... Negotiations have gone on for years, and still
there are no commitments to provide names of account holders.
"The Department of Justice needs to use the tools in its
arsenal to collect the taxes owed," he added.
According to the 176-page report from Levin's panel, Credit
Suisse bankers secretly traveled the United States - sometimes
on tourist visas - to recruit clients. One former customer told
the panel he once met a Credit Suisse banker at a hotel and,
over breakfast, the banker handed over bank statements tucked
into the pages of an issue of Sports Illustrated.
The bank has been in authorities' sights for years. It
disclosed in 2011 it had received a "target letter" from
prosecutors indicating that the bank was under criminal
investigation. Also in 2011 a grand jury issued a subpoena
seeking client names and account information, the report said,
citing a briefing by Credit Suisse.
Seven of its Swiss bankers were indicted in that year, but
all remain overseas.
Instead of enforcing the subpoena or threatening to indict
the bank and entering an agreement to obtain client names, the
panel said, the DOJ has largely deferred to Swiss authorities
who have limited the documents being turned over.
After about two years of digging, U.S. authorities had
unearthed information on only 238 U.S. customer accounts out of
the 22,000 total, the report said, citing an interview with
Credit Suisse General Counsel Romeo Cerutti, who is scheduled to
testify on Wednesday.
In the statement, the Justice Department said the agency was
able to receive information through a U.S.-Swiss treaty process,
but that information was not yet known to the public.