The Swiss wealth management firm Swisspartners has agreed to pay the US Department of Justice USD4.4 million to avoid being prosecuted for helping its American clients conceal overseas assets.
The company has also turned in to the US Internal Revenue Service 110 clients who owned assets through sham trusts and foundations.
Swisspartners was founded in 1993 by three Swiss nationals, and in 2005 it was taken over by Vaduz-based Liechtensteinische Landesbank AG (LLB). According to the Justice Department, it has been working to exit the US tax evasion industry since April 2008, when the USDoJ began its criminal investigation of the Swiss bank UBS. In 2012, even though Swisspartners was not under US investigation, it contacted the USDoJ to confess to its past record in assisting US taxpayers to evade federal income tax.
Specifically, Swisspartners admitted that, from about 2001, it helped US clients conceal their beneficial ownership of undeclared assets in foreign bank accounts by creating sham foundations and other sham entities that acted as the nominal accountholders. It also sold its US clients insurance policies for which they paid using funds held in undeclared Swiss accounts. To support these activities, the company arranged for large quantities of cash to be transported in both directions between Switzerland and the US on behalf of the clients.
The non-prosecution agreement applies only to Swisspartners Investment Network AG and three named subsidiaries – Zurich-based Swisspartners Wealth Management AG, which sets up and manages foundations and trusts; Cayman Islands-based life insurance carrier Swisspartners Insurance Company SPC Ltd; and a Liechtenstein-based Swisspartners Versicherung AG, an insurance carrier. It does not give immunity to any other companies or to any individuals.
Swisspartners’ majority owner, LLB Vaduz, settled its own dispute with the USDoJ last year, with a non-prosecution agreement that cost it USD24 million, and forced it to hand over the names of 200 American clients. At the time LLB said it was still negotiating a settlement for Swisspartners and its other Swiss subsidiary, LLB (Switzerland) Ltd.
The USDoJ will now begin investigating the 110 account files handed over by Swisspartners. In the meantime, Swisspartners has had to promise to continue to cooperate with the investigations for at least a further three years.