Article: Credit Suisse Pressed by Senator on $200 Million Tax Fraud

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Credit Suisse Pressed by Senator on $200 Million Tax Fraud

David Voreacos, 27 April 2021

Credit Suisse Group AG, already under pressure for losing $5.5 billion in the collapse of Archegos Capital Management, must now answer questions from a powerful U.S. senator about a seven-year-old tax evasion scandal.

Senate Finance Committee Chairman Ron Wyden wrote Tuesday to Credit Suisse and the Justice Department, asking their leaders to explain how the lender’s banking unit could have pleaded guilty in May 2014 to enabling U.S. tax evasion but failed to disclose more than $200 million in accounts held by an American.

Wyden asked Credit Suisse Chief Executive Thomas Gottstein and Attorney General Merrick Garland about the bank’s handling of accounts held by former business professor Dan Horsky. After whistle-blowers told the Justice Department about the accounts in July 2014, Internal Revenue Service agents approached Horsky in 2015. He cooperated with U.S. authorities and pleaded guilty to tax fraud in 2016.

“If Credit Suisse did not report Mr. Horsky’s accounts to the DOJ, IRS or any other element of the government prior to July 2014, please explain why,” Wyden wrote. “Is this attributable to a lapse in internal controls in which Credit Suisse failed to identify Mr. Horsky as the beneficial owner of these accounts, or a willful decision not to report the existence of these accounts?”

Wyden said “important questions” exist “as to whether Credit Suisse fully complied” with its plea agreement. He gave Gottstein and Garland — President Joe Biden’s newly appointed AG — until May 11 to reply.

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