U.S. Is Said to Expand Tax Inquiry
By LYNNLEY BROWNING, The New York Times
The Justice Department has expanded its criminal investigation into foreign banks that sell offshore private banking services to include Credit Suisse and HSBC, according to people briefed on the matter.
The investigation into the two European banks is an outgrowth of an inquiry by federal prosecutors and regulators into UBS, the Swiss bank giant, over its sale of offshore banking services to wealthy Americans. Federal prosecutors, who are focusing on senior and midlevel executives and bankers at UBS, contend that UBS illegally helped American clients hide up to $20 billion in secret offshore accounts, thereby evading $300 million a year in taxes from 2000 to 2007.
HSBC, which is based in London and is Europe’s largest bank, is a global financial giant with large retail, private, asset management and investment banking operations across the United States and Asia. Credit Suisse, which is based in Zurich, is also one of the world’s largest private banks, with significant operations in the United States.
The investigation into HSBC and Credit Suisse began about September and is focusing on whether the two banks helped wealthy American clients hide up to $30 billion in offshore accounts that went undeclared to the Internal Revenue Service, the people briefed on the matter said. Prosecutors are examining whether the two banks illegally helped their American clients use those offshore accounts to evade United States taxes and whether the clients themselves violated United States laws.
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