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Names’ Bond, Municipal Bond. According to a new report by the Senate avoiding taxes has become absurdly clandestine with Swiss bankers using “cloak and dagger” methods when advising their clients. Swiss banking giant Credit Suisse used every trick in the book to help 22,000 of its US customers evade the law. While some of the strategies seem fantastic, the results were all too real as the government lost billions in potential revenue.

Credit Suisse mastered the use of deception to allow their American clients to avoid the tax man.

According to the report, bankers filed false visa applications pretending they were tourists, and conducted business at sponsored golf events.

One customer told the investigation that his bank statements were passed to him over a business breakfast hidden inside a copy of Sports Illustrated. US clients who visited the bank in Switzerland were whisked to meetings in a button-less, remote controlled elevator. Once they arrived, they would be advised on the best way to circumvent US tax laws, said Levin.Credit Suisse’s US office used a series of intermediaries, some of which have since come under indictment, to set up a series of offshore shell companies for US clients “in order to hide their assets,” according to Levin. Large sums were divided into smaller ones before they were sent to the US so as not to trigger investigations by US tax authorities.

Rich people do love their little games.

Despite learning of massive tax evasion to the tune of billions of dollars the report argues that US authorities showed only moderate interest in prosecutions. Maybe that’s because the person generally shifting millions into a Swiss bank account might have a few dollars to spare for the DC political class or maybe because the 1% can afford excellent lawyers. In any case, even when people where caught evading the law there was not much punishment beyond admission and a fine.

Credit Suisse itself seems to be getting just such a punishment despite it’s clear guilt.

Last week Credit Suisse agreed to pay $197m to regulators after it admitted to servicing thousands of US clients without approval. The agreement left unsettled a criminal probe into Credit Suisse and others over whether they helped Americans evade taxes.

$197 million may seem like a lot but it is a drop in the bucket for Credit Suisse who has made billions off the practice over the years and has $924 billion in total assets. It is still not exactly resolved as to what Credit Suisse will do going forward. Evading taxes is a major business for them and Swiss law does not make it a crime.

More to the point, shutting down the Swiss route for tax evasion is just the first step. There are a host of islands in the Caribbean who have reoriented themselves around gaming US tax and regulatory rules.

Photo by Rillke under Creative Commons license.