Whistleblowers who defied Credit Suisse are about to share up to $150 million

Mint

08-05-2025

A decade ago, Credit Suisse pleaded guilty to helping Americans evade taxes by stashing cash and assets overseas and pledged to stop doing so.
Now former bank employees collectively stand to make up to $150 million for quietly telling U.S. authorities that Credit Suisse wasn't living up to its promise.
A Credit Suisse unit this week pleaded guilty again to helping Americans hide their assets to evade taxes and agreed to pay $511 million for not meeting the terms of a 2014 settlement with U.S. authorities. Credit Suisse is now owned by UBS after an emergency 2023 rescue.
Credit Suisse admitted that it opened more than two dozen potentially tax-dodging U.S. accounts after the 2014 deal, hung on to other big accounts that it was supposed to have reported and closed or helped wealthy clients move their assets without telling the Internal Revenue Service, the plea agreement said.
In all, there were at least 475 accounts that Credit Suisse should have known were tied to Americans as of around 2018, holding $4 billion, the filing said.
UBS said it was pleased to have resolved another of Credit Suisse's legacy issues.
Two bankers have so far emerged as whistleblowers in the case, though it is possible that more might do so. They could collect between 15% and 30% from the Justice Department settlement, which could be one of the largest tax whistleblower awards in IRS history. A former UBS banker who helped the U.S. first lift the veil of Swiss bank secrecy received $104 million in 2012. Other government whistleblower programs have paid larger sums, including a $279 million Securities and Exchange Commission award to a tipster in a foreign bribery case in 2023.
The Credit Suisse pair haven't identified themselves publicly for fear of prosecution under Swiss bank secrecy laws, which bar bankers from discussing clients with anyone outside of their institutions—including foreign tax authorities.
'They feel vindicated—for telling the truth, for risking everything, and for standing up to one of the world's most powerful financial institutions," said Jeffrey Neiman, a lawyer for the whistleblowers.
The case is the latest in a near two-decade effort by U.S. prosecutors to punish Swiss banks for helping Americans hide accounts, and shows how deep rooted the practice was.
The whistleblowers' interest in the case began in 2014 when then-Credit Suisse CEO Brady Dougan told a U.S. Senate committee that the misconduct was all historic behavior of around a dozen people who had all been fired.
'These people went to great lengths to disguise their bad conduct from the bank," Dougan testified along with other Credit Suisse executives. Dougan, who left the bank in 2015, didn't respond to a request for comment.
One of the whistleblowers, a former South America desk banker, recalled in an interview watching the testimony at Al Leone, a popular cafe for bankers in Zurich. He said he shouted at the television: 'They are lying!"
He knew the practice was endemic. Bank executives, he said, tried to get a $100 million account in South America moved to other banks without disclosing the client's American passport. The Justice Department highlighted the poor handling of the account, for a Colombian American woman and her family, in court filings Monday.
After Credit Suisse's 2014 guilty plea, the bank was supposed to give the Justice Department the names of American customers leaving for other banks. Instead, some bankers referred customers to other banks with their foreign passports, omitting to say that they also were American, the former banker said.
Other customers sought to hide behind parents or siblings who weren't Americans, sometimes with Credit Suisse bankers falsifying records to help, prosecutors said.
In another situation, prosecutors said, Credit Suisse bankers appeared to turn a blind eye to the status of a scion of a wealthy European family who had more than $1 billion in his accounts and was resident in the U.S. Credit Suisse assisted in payments for the billionaire's U.S. taxes in 2014 but didn't probe further.
The Justice Department said a cursory review of public information showed that the scion was regularly identified in news articles as living in a mansion in the U.S.
The bank's executives were so brazen that they assigned one dual national's $200 million account on the bank's Israeli desk to a junior banker, with a plan to blame the trainee if things went south, the second whistleblower said in an interview.
Within months after Credit Suisse pleaded guilty in 2014, this whistleblower approached U.S. authorities. The owner of the Israeli account, an American professor named Dan Horsky paid a $100 million penalty to the U.S. government in 2016 and pleaded guilty to conspiracy to defraud the government.
In Monday's statement of facts, prosecutors said that Credit Suisse knew the Horsky account should have been declared before the 2014 settlement and that a Credit Suisse executive went to Tel Aviv in January 2016 to strategize with Horsky on ways to conceal his control of the account.
The filing said that bankers helped other customers carry out fictitious donations to sidestep owning an account in bank records, and that in 2022 a single Swiss lawyer was found by compliance staff to be handling 104 accounts for 13 American clients who had been able to avoid detection for U.S. tax.
UBS came close to settling over the Credit Suisse accounts earlier this year, The Wall Street Journal reported in January, and might have avoided another Credit Suisse guilty plea had it done so. That deal fell through in the final days of the Biden-era Justice Department. Monday's agreement puts Credit Suisse on three-years probation.
The penalty had hung over Credit Suisse in its final years and was in UBS's calculations for potential legal costs before the 2023 takeover.
Write to Aruna Viswanatha at [e-mail] and Margot Patrick at [e-mail]