Banque Pictet Admits to Conspiring with U.S. Taxpayers to Hide $5.6 Billion

Swiss private bank Banque Pictet et Cie SA (Banque Pictet) has entered into a deferred prosecution agreement with the U.S. Department of Justice (DOJ) after admitting to conspiring with U.S. taxpayers and others to hide more than $5.6 billion in assets. According to a DOJ press release, Banque Pictet held these assets in “secret bank accounts in Switzerland and elsewhere” for the specific purpose of concealing taxpayers’ income from the IRS. As Boston tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, explains, the taxpayers involved could now face scrutiny from the Internal Revenue Service—and potentially criminal prosecution by the DOJ.

Banque Pictet Will Cooperate with the DOJ’s Ongoing Investigation

As part of its deferred prosecution agreement, Banque Pictet will cooperate with the DOJ’s ongoing investigation into U.S. taxpayers’ use of offshore accounts to conceal assets and income. This apparently includes disclosing the identities of the taxpayers involved. As stated by the DOJ:

“Specifically, the Bank is required to cooperate fully with ongoing investigations and affirmatively disclose any information it may later uncover regarding U.S.-related accounts. . . . The agreements provide no protection from criminal or civil prosecution for any individuals.”

Banque Pictet must continue to cooperate for the next three years in order to satisfy the terms of its deferred prosecution agreement. If it does so, then the DOJ will seek to dismiss all charges pending against the bank.

DOJ: Banque Pictet Used “a Variety of Means” to Help U.S. Taxpayers Conceal Foreign Bank Accounts

The DOJ’s press release states that Banque Pictet used “a variety of means” to help U.S. taxpayers conceal their foreign bank accounts and avoid paying federal income tax. These means are likely to be the focus of the DOJ’s investigation going forward. Some examples of the types of practices the DOJ will be examining as it continues its investigation include:

• Forming offshore entities for U.S. taxpayers and opening new accounts in these entities’ names, and then failing to declare these accounts;
• Managing undeclared accounts in the names of offshore entities formed by U.S. taxpayers;
• Opening and maintaining Private Placement Life Insurance policy accounts in the name of insurance companies but beneficially owned by U.S. taxpayers and subsequently managing and funding them through undeclared accounts;
• Transferring funds from undeclared accounts to accounts “nominally held by non-U.S. clients but still controlled by U.S. taxpayer[s];” and,
• Accepting IRS Forms W-8BEN when the bank knew or should have known that they falsely indicated that offshore entities owned the assets in U.S. taxpayers’ undeclared accounts.

Request a Confidential Consultation with Boston Tax Lawyer Kevin E. Thorn

Our firm represents U.S. taxpayers in federal tax controversies involving offshore accounts and other foreign financial assets. If you have concerns about the DOJ’s deferred prosecution agreement with Banque Pictet, or if you have any other concerns related to your offshore holdings, we encourage you to get in touch. To request a confidential consultation with Boston tax lawyer Kevin E. Thorn, Managing Partner of Thorn Law Group, please call 617-692-2989 or contact us online today.