Swiss Life to pay $77.4 million to settle U.S. criminal tax evasion case
11:46 am Friday, May 14th, 2021
By Jonathan Stempel and Tom Hals
NEW YORK (Reuters) -Swiss Life Holding AG agreed to pay $77.4 million and enter a deferred prosecution agreement to resolve a U.S. criminal case in which Switzerland’s largest insurer was accused of helping wealthy American clients evade taxes.
The three-year agreement announced on Friday resolves a charge that Swiss Life conspired to defraud the U.S. Internal Revenue Service by concealing more than $1.45 billion in offshore insurance policies.
These included more than 1,600 “wrapper” insurance policies into which taxpayers can place stocks, private equity holdings and other assets.
U.S. prosecutors began cracking down more than a decade ago on the use of Swiss banks to avoid federal taxes.
Swiss Life and its affiliates viewed this “stepped-up offshore tax enforcement as an opportunity to pitch themselves to tax-evading U.S. customers as an alternative to Swiss banks,” U.S. Attorney Audrey Strauss in Manhattan said in a statement.
The Zurich-based insurer will pay a $25.3 million fine plus $52.1 million in restitution and forfeiture, and hand over information about accounts it closed between 2008 and 2019.
Swiss Life has said it set aside sufficient funds in 2020 to cover the payment.
Its general counsel accepted the deferred prosecution agreement at a hearing before U.S. District Judge Gregory Woods in Manhattan.
An agreement by Swiss bank UBS in 2009 to pay a $780 million penalty and hand over names and data on thousands of client accounts helped kick off numerous settlements with other Swiss financial companies.
Rahn+Bodmer, Zurich’s oldest private bank, agreed in March to pay $22 million to settle U.S. charges it helped taxpayers who fled UBS and other Swiss banks hide money in offshore accounts.
(Reporting by Jonathan Stempel in New York and Tom Hals in Wilmington, Delaware; Editing by Bill Berkrot and John Stonestreet)
