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Ex-Credit Suisse Banker/Fugitive Pleads Guilty in Tax Evasion Case

According to the DoJ  a former Credit Suisse AG banker, who has been a fugitive since 2011, pleaded guilty on June 22, 2016 in U.S. District Court in the Eastern District of Virginia to charges related to aiding and assisting U.S. taxpayers in evading their income taxes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

 
Michele Bergantino, 48, a citizen of Italy and a resident of Switzerland, pleaded guilty before U.S. District Judge Gerald Bruce Lee to conspiring to defraud the United States by assisting U.S. taxpayers to conceal foreign accounts and evade U.S. tax during his employment as a banker working for Credit Suisse AG on its North American desk.
 
“Mr. Bergantino is now the third fugitive to come to the United States and plead guilty to charges in this case,” said Acting Assistant Attorney General Ciraolo. “To those who have actively assisted U.S. taxpayers in using offshore accounts to evade taxes, the message is clear:  staying outside the United States will provide little comfort.  We will investigate and charge you, and will work relentlessly to hold you to account for your actions.”
 
“Hiding assets and creating secret accounts in an attempt to evade income taxes is a losing game,” said U.S. Attorney Boente. “Today’s plea shows that we will continue to prosecute bankers and U.S. citizens who engage in this criminal activity. I want to thank our law enforcement partners and prosecutors for their work on this important case.”
 
Bergantino admitted that from 2002 to 2009, while working as a relationship manager for Credit Suisse in Switzerland, he participated in a wide-ranging conspiracy to aid and assist U.S. taxpayers in evading their income taxes by concealing assets and income in secret Swiss bank accounts. 
 
Bergantino oversaw a portfolio of accounts, largely owned by U.S. taxpayers residing on the West Coast, which grew to approximately $700 million of assets under management.  Bergantino admitted that the tax loss associated with his criminal conduct was more than $1.5 million but less than or equal to $3.5 million.
 
During his time as a relationship manager, Bergantino assisted many U.S. clients in utilizing their Credit Suisse accounts to evade their U.S. income taxes and to facilitate concealment of the U.S clients’ undeclared financial accounts from the U.S. Treasury Department and the Internal Revenue Service (IRS). 
 
Among the steps taken by Bergantino to assist clients in hiding their Swiss accounts were the following: 
 
  • assuring them that Swiss bank secrecy laws would prevent Credit Suisse from disclosing their undeclared accounts to U.S. law enforcement;
  • discussing business with clients only when they traveled to Zurich to meet him;
  • structuring withdrawals from their undeclared accounts by sending multiple checks, each in amounts below $10,000, to clients in the United States;
  • facilitating the withdrawal of large sums of cash by U.S. customers from their Credit Suisse accounts at Credit Suisse offices in the Bahamas, in Switzerland, particularly the Credit Suisse branch at the Zurich airport and at a financial institution in the United Kingdom;
  • holding clients’ mail from delivery to the United States;
  • issuing withdrawal checks from Credit Suisse’s correspondent bank in the United States; and
  • taking actions to remove evidence of a U.S. client’s control over an account because the U.S. client intended to file a false and fraudulent income tax return. 

Moreover, Bergantino understood that a number of his U.S. clients concealed their ownership and control of foreign financial accounts by holding those accounts in the names of nominee tax haven entities, or structures, which were frequently created in the form of foreign partnerships, trusts, corporations or foundations.

“Today’s plea of Michele Bergantino is another example of IRS-Criminal Investigation’s (CI) dedication to Bringing Individuals to Justice who engage in helping U.S. Taxpayers Eade their Tax Obligations,” said IRS-CI Chief Richard Weber.  
“We will continue our Global Efforts to Vigorously Pursue both U.S. Taxpayers...and the Unscrupulous Professionals who Facilitate Their actions.
 
For those Hiding Cash or Assets Offshore,
The Time To Come Clean is NOW.”

Bergantino also admitted traveling to the United States approximately one to two times a year to meet with clients, taking careful steps to conceal the purpose of his visits from U.S. law enforcement. 

He used private couriers to send clients’ account statements to the U.S. hotels where he stayed, so that he would not be caught traveling with clients’ statements in his possession. 

In addition, Bergantino obtained “travel” account statements for each client he intended to visit which were devoid of Credit Suisse’s logo and account or customer identification information and used business cards that Credit Suisse provided that contained only his name and office number and did not carry the Credit Suisse name or logo. 

On entering the United States, Bergantino provided misleading information regarding the nature and purpose of his visit to U.S. Customs and Border Protection authorities.

Two of Bergantino’s co-defendants, Andreas Bachmann and Josef Dörig, pleaded guilty to the superseding indictment in 2014 and were sentenced on March 27, 2015.  Credit Suisse pleaded guilty in May 2014 for conspiring to aid and assist taxpayers in filing false returns and was sentenced in November 2014 to pay $2.6 billion in fines and restitution.

Bergantino faces a statutory maximum sentence of 5 years in prison.  He also faces monetary penalties and restitution.
 

“Mr. Bergantino voluntarily surrendered to the authorities,” said his attorney, Thomas Zehnle. “He accepts full responsibility for his past actions. He’s confident that the U.S. justice system will treat him fairly, and he’ll accept the court’s sentence, whatever it is.”

For more on where will the IRS and the DoJ will turn next as they sift through a treasure trove of data gathered from Swiss banks and from more than 50,000 U.S. taxpayers who disclosed their accounts to avoid prosecution, see our posts:

Do You Have Undeclared Income From Foreign Banks?
 

 

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Sources:

DoJ
Bloomberg
AccountingToday

Read more at: Tax Times blog

 
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