The Swiss financial institution Julius Baer Group has agreed to pay a fine of $122.9 million after U.S. authorities accused them of helping U.S. citizens hide billions of dollars from the Internal Revenue Service (IRS).
The Department of Justice (DOJ) announced on Wednesday that Julius Baer had consented to pay the fine to resolve the claims of assisting U.S. taxpayers in evading their federal income taxes, for which they could have been subject to prosecution.
According to the Department of Justice, Julius Baer’s U.S. subsidiaries “conspired with U.S. taxpayers to hide millions of dollars in offshore accounts in violation of U.S. law.”
The Justice Department further stated that Julius Baer’s U.S. subsidiaries took part in a “scheme to help U.S. taxpayers conceal tens of millions of dollars in taxable assets” and “aided U.S. taxpayers in establishing and maintaining undeclared accounts in Switzerland, Liechtenstein, and other jurisdictions” over the past decade.
The fine is being imposed by U.S. District Court for the District of Columbia on behalf of the U.S. government, who accuses Julius Baer of helping U.S. citizens hide billions of dollars in offshore accounts and aided in the preparation of false documents that were used in these schemes.
“The Julius Baer Group deeply regrets the conduct of its U.S. subsidiaries and the associated music related to U.S. clients,” said Julius Baer CEO Boris Collardi in a statement.
The Swiss banking giant “took appropriate measures to remedy the issues, including a comprehensive settlement with the U.S. government, consisting of a payment of $99.2 million in restitution to the IRS and an agreement to pay an additional penalty of $23.7 million for certain actions that occurred at its predecessor bank,” Collardi said.
He further added, “We are committed to ensure that Julius Baer continues to be a trusted and compliant partner going forward, working closely with clients and regulators.”
The fine is part of a larger US effort to uncover overseas accounts held by US citizens and combat tax evasion. The US has previously imposed large fines on several major Swiss banks in recent years for the same issue, and the Julius Baer action is unlikely to be the last of its kind.
It serves as a warning to other financial institutions that they must comply with US laws or face significant penalties.