Swiss bankers plead not guilty in New York

ZKB is the largest of Switzerland's network of cantonal banks Keystone

Two bankers from Zurich’s cantonal bank have pleaded not guilty in a New York court after leaving Switzerland to voluntarily face charges of helping American clients evade taxes. 

The two men, along with a third employee of the bank ZKB, were among those charged by US authorities in cases related to offshore tax evasion by wealthy Americans using Swiss banks. They stand accused of having helped to hide at least $423 million (CHF429 million) in US taxpayer assets for nearly 200 clients between 2003 and 2009.  

The employees were originally charged in 2012 but remained outside the reach of US authorities while living in Switzerland. They voluntarily travelled to New York to face the charges against them, according to statements from Assistant US Attorney Noah Solowiejczk made in a Manhattan court on Monday. Both filed pleas of not guilty. 

The charges mark the first time employees of a cantonal bank, which benefit from a state guarantee, were indicted by US authorities. 

On Monday, both ZKB bankers were released on bonds of $150,000 and ordered to remain in New York. According to Reuters, prosecutors said in court they were discussing resolving the case with the defendants. 

Codenames

The indictment against the ZKB bankers stated that both men helped clients establish undeclared accounts using codenames or names of fake companies and made sure that correspondence relating to the accounts was not mailed to the United States. 

Because of the ongoing investigation into its activities with US clients, ZKB was one of several Swiss banks assigned to category one of the US Justice Department’s programme to resolve tax evasion issues. Category one banks, which had the most exposure to US clients, will face the stiffest penalties. 

In its annual report in February, ZKB indicated that it had not yet resolved the matter with US authorities but that it was ready to do so. The bank did not respond to a request by Reuters for comment on Monday’s court proceedings.