Credit Suisse offices in 13 cities searched in latest tax evasion crackdown

News - Banking

Written by Ray Clancy

Wednesday, 21 July 2010 08:21

In their latest crackdown German investigators have searched the private banking operations of Credit Suisse offices in 13 cities as part of a widening clampdown on tax evaders.

The searches involved 150 staff and included tax officials and prosecutors focussed on ‘unnamed’ bank employees following an earlier probe in March which sought to identify bank clients.

Both investigations were launched after analysing a compact disc with client names that was bought by tax authorities earlier this year, a spokesman for the Duesseldorf prosecutor’s office said. He confirmed that computer specialists were at the offices copying the hard drives.

Credit Suisse spokesman Marc Dosch confirmed the searches. ‘Credit Suisse is cooperating with authorities. As this concerns an ongoing investigation we are unable to comment further at this moment in time,’ he said. He added that its operations in Germany and elsewhere ‘conform with the local laws.’

However, some in the industry think it is an attempt to get clients to come clean rather than a major investigation. ‘It seems to me to be a high profile attempt to scare clients in to confessing tax evasion rather than the outcome of a laser targeted probe,’ a private banker who declined to be named said. ‘How come the searches are targeting unnamed bankers if it’s so obvious who the clients are? And why do they need to search all of the offices in Germany?,’ he added.

Since the latest client CD fell into the hands of tax authorities in Germany more than 10,000 people have confessed to evading taxes to state authorities, German media have said.

The searches do, however, put further pressure Swiss banks as Germany and the tiny alpine nation seek to negotiate the details of a double taxation agreement.

In March, Credit Suisse restricted its bankers’ travel to Germany after German authorities said they had opened 1,100 tax evasion probes against the bank’s clients and were investigating staff on suspicion of aiding evasion.

The probe is related to a CD with client data offered to the German state of North Rhine-Westphalia which is said to contain details from 1,500 alleged evaders.

Under German law, those who report undeclared income themselves and pay back tax plus interest owed before an investigation is started are exempt from prosecution.

In 2008, Germany paid for stolen data from Liechtenstein’s top bank LGT. Former Deutsche Post chief Klaus Zumwinkel's Liechtenstein trust was uncovered in that data, and he admitted to tax evasion.