Reichmuth will pay a penalty of $2.592 million; BCJ will pay a penalty of $970,000 and BIM Suisse pays no penalty.         

The US and Switzerland signed a programme in 2013 under which Swiss banks can choose to enter non-prosecution agreements with the US in return for stating if there had been a risk of holding undeclared US client money. A raft of banks have already entered such agreements in recent weeks.

Commenting on the latest three banks, the US Department of Justice stated that Privatbank Reichmuth & Co was founded in 1996 as an external asset management firm. It is now a private bank headquartered in Lucerne, Switzerland.  

Reichmuth knew that it was likely that certain US customers who maintained accounts there were not complying with their US income tax and reporting obligations, the DoJ said in a statement yesterday.

In the period since 1 August 2008, Reichmuth opened at least 14 undeclared US-related accounts that came from UBS or another bank under investigation by the department, the DoJ said.

In 2001, Reichmuth entered into a Qualified Intermediary agreement with the Internal Revenue Service. The agreement took account of the fact that Reichmuth, like other Swiss banks, was prohibited by Swiss law from disclosing the identity of an accountholder. In general, if an accountholder wanted to trade in US securities and avoid mandatory US tax withholding, the QI agreement required Reichmuth to obtain the consent of the accountholder to disclose the client’s identity to the IRS.

Reichmuth’s position was that it could assist US accountholders that it knew or had reason to believe were engaged in tax evasion so long as its accountholders were prohibited from trading in US-based securities or the account was nominally structured in the name of a non-US based entity, the DoJ said.

Since 1 August 2008, Reichmuth permitted US customers to open and maintain at least 18 undeclared accounts held in the name of non-US corporations, foundations, trusts or other legal entities. Of these structures, seven were domiciled in Liechtenstein, five in Panama, five in St Vincent and the Grenadines and one in the British Virgin Islands.  “Even though Reichmuth was aware that US persons were the beneficial owners of those accounts, Reichmuth obtained documents from the nominal accountholders that falsely declared they were not US taxpayers," the DoJ said.

Since 1 August 2008, Reichmuth maintained and serviced 103 US-related accounts with an aggregate value of approximately $281 million, including both declared and undeclared accounts. 

Banque Cantonale du Jura was formed in 1979 and is headquartered in Porrentruy, Switzerland. BCJ opened and maintained undeclared accounts for certain US client taxpayers while knowing or having reason to know that by doing so it was likely helping these US taxpayers evade their US tax obligations. BCJ was aware, or should have been aware, that this conduct violated US law.

Due in part to the assistance of BCJ and its personnel, and with the knowledge that Swiss banking secrecy laws would prevent BCJ from disclosing their identities to the IRS, some of BCJ’s US clients filed false and fraudulent US individual income tax returns (IRS Forms 1040), failing to report their respective interests in their undeclared accounts and the related income. Some of BCJ’s US clients also failed to file and otherwise report their undeclared accounts on Reports of Foreign Bank and Financial Accounts (FBARs).

Since 1 August 2008, BCJ had 18 US clients with a total of 118 US-related accounts. The aggregate amount of assets under management of all accounts associated with US taxpayers at BCJ was approximately $10 million.

Banca Intermobiliare di Investimenti e Gestioni (Suisse), or BIM Suisse, was established in 2001 and is located in Lugano, Switzerland.

In January 2002, BIM Suisse entered into a QI agreement with the IRS.  BIM Suisse subverted the terms of that agreement by failing to fully comply with both its withholding and reporting obligations to the IRS, thus enabling US accountholders to avoid reporting their accounts to the US authorities, the DoJ said.

Between 1 August 2008 and May 2015, BIM Suisse closed 13 of its 16 US-related accounts. As of July 2015, BIM Suisse maintains only three US-related accounts, and none of those accounts remain undisclosed to the US tax authorities. Under the terms of the agreement signed today, BIM Suisse will not pay a penalty.

“The department is acquiring detailed information regarding the many ways in which US taxpayers attempt to hide foreign assets, including through the use of sham trusts and insurance policies wrapped around foreign bank accounts to shroud the identity of US beneficial owners,” said acting assistant attorney general Caroline Ciraolo of the Department of Justice’s tax division.