Swiss bank Pictet settles with US over tax evasion case

Swiss private banking group Banque Pictet & Cie SA has reached a settlement with the U.S. Department of Justice (DOJ), agreeing to a Deferred Prosecution Agreement (DPA) after admitting to its role in aiding American clients to evade taxes. The Zurich-based institution managed 1,637 hidden accounts, which held more than $5.6 billion in assets and helped U.S. taxpayers avoid approximately $50.6 million in taxes owed to the Internal Revenue Service (IRS).

The bank’s acknowledgment of its involvement covers a period between 2008 and 2014, during which it provided estate planning services and worked through its subsidiary Rhone Trust and Fiduciary Services SA to facilitate the tax evasion scheme. To resolve the charges, Pictet has agreed to pay $122.9 million, a sum that includes fees earned from the undisclosed accounts, unpaid taxes, and penalties.

Jim Lee, chief of IRS Criminal Investigation (IRS-CI), emphasized the agency’s effectiveness in uncovering offshore tax evasion schemes, signaling a continued effort to trace such illicit financial activities.

As part of the agreement’s conditions, Pictet is required to take several steps:

• Implement remedial measures to prevent future misconduct
• Accept responsibility for its past conduct
• Refrain from engaging in any further illegal activities
• Cooperate with ongoing investigations into secret bank accounts

While prosecution will be deferred for three years under the DPA, there is an opportunity for the charges against the bank to be dismissed if Pictet fully complies with the agreement’s terms during this period. However, this settlement does not extend clemency to individuals who may still face criminal or civil actions related to their involvement in these activities.

In conjunction with these developments, Banque Pictet is also preparing for a leadership transition set for July 1, when Marc Pictet will succeed Renaud de Planta as senior partner.

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