The five employees, whose ban from banking is effective immediately, were associated with a Fed investigation into their failure to comply with federal banking laws and assisting U.S. citizens in evading federal income taxes. Markus Walder, Marco Parenti Adami, Susanne Ruegg Meier, Michele Bergantino, and Roger Schaerer had been previously indicted for conspiracy to defraud the U.S. government. In a statement today, the Fed said the bank employees “would impair public confidence in the institution” if they remained working at the banks.
Nearly one year ago, Swiss banking concern admitted to a US court that it established phony corporations that allowed U.S. taxpayers to unlawfully shield income from the Internal Revenue Service (IRS). Last May the bank agreed to pay out $1.8 billion to the federal authorities, $715 million to the New York state banking regulator and $100 million to the Federal Reserve. The bank had previously settled a $196 million fine with the US Securities and Exchange Commission, bringing the total bill to $2.8 billion. Today’s Federal Reserve punishment focuses on the individuals involved.
Credit Suisse employees involved in setting up phony tax shelters
As head of Credit Suisse’s North American Offshore Banking business, Walder was responsible for the bank’s undeclared U.S. cross-border banking business and apparent overall mastermind of the program. He was a Director within Credit Suisse and supervised teams of private bankers in Switzerland and New York.
Adami, Meier, and Bergantino reported to Walder and were private bankers who provided advice to U.S. customers who maintained undeclared Swiss bank accounts, a Fed statement said. Schaerer, for his part, ran the New York Representative Office of Credit Suisse and was the bank’s Senior Representative in the United States. According to the indictment, Walder, Adami, Meier, Bergantino, and Schaerer assisted clients in evading U.S. taxes through the use of undeclared Swiss accounts.
Hensarling targets Fed, Justice, Treasury for answers
The apparent regulatory action targeting individual bank employees for criminal behavior comes as Congressman Jeb Hensarling (R-TX), Chairman of the House Financial Services Committee, announced subpoenas were issued today compelling the New York Federal Reserve Bank, the Justice Department and Treasury Department to provide information related to the lack of prosecutions and debt ceiling planning issues.