US charges Swiss finance firm and six people with tax evasion

The US still suspects some elements of the Swiss financial centre of helping tax evaders. © Keystone / Ti-press / Alessandro Crinari

Six people and a Swiss financial services firm have been charged in the United States with helping clients evade taxes on $60 million (CHF56 million) of assets.

This content was published on September 29, 2021 - 12:51

They are accused of setting up an elaborate scheme, known as the “Singapore Solution”, to funnel money out of Switzerland, through structures in Hong Kong and Singapore, and back into Swiss bank accounts.

Three US clients used the scheme between 2009 and 2014 to hide tens of millions of dollars from the US tax authorities, according to a Department of Justice (DoJ) indictmentExternal link that was unsealed on Tuesday.

The indictment alleges that the funds started off in undeclared accounts at Swiss private bank IHAG before being round-tripped through Asia and back into the same bank. However, IHAG has not been charged with wrongdoing by the DoJ.

Charges have instead been brought against six financial services professionals and the Zurich company Allied Finance Trust, which went into liquidation in March, according to the Swiss commercial register.

Three of the indicted people had connections to IHAG private bank. One resigned his senior position at the holding company that owns IHAG bank on Wednesday. A senior manager at the bank also stepped down on September 20 this year. A third indicted person is a former employee who left IHAG in 2001.

But IHAG told SWI that the bank itself is “not involved in these proceedings in any way”. The bank points out that it had previously cooperated with the DoJ’s Swiss bank program, paying more than $7 million in penaltiesExternal link in 2015.

The Swiss bank program, brokered by the Swiss government in 2013, saw dozens of Swiss banks come clean about their practices and pay fines to avoid prosecution in the US.

But the latest case demonstrates that the DoJ still has the Swiss financial centre in its crosshairs.

Switzerland also continues to be criticised by the Financial Action Taskforce (FATF) and Transparency International for failing to crack down on lawyers and other financial professionals who are suspected of helping people evade taxes.  


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