By Joel Schectman
WASHINGTON--Two former Credit Suisse AG bankers who pleaded
guilty to helping wealthy Americans evade taxes received no jail
time after cooperating in the U.S. case against the Swiss bank.
The sentence of five years' probation and a fine, handed down on
Friday, reflected the men's cooperation, which helped the Justice
Department secure its first guilty plea against a financial
institution in more than a decade, according to people familiar
with the matter. The deal shows the steps authorities are willing
to take to help make cases against big companies at a time when the
Justice Department has been accused of failing to hold Wall Street
accountable.
Last May, Credit Suisse agreed to pay $2.6 billion and pleaded
guilty to "knowingly and willfully" helping thousands of U.S.
clients open accounts and conceal their income from the IRS.
A spokesman for Credit Suisse declined to comment.
A federal judge in District Court in Alexandria, Va. sentenced
Josef Dörig and Andreas Bachmann each to five years of unsupervised
probation for their roles in helping U.S. customers hide earnings
from American tax authorities through a web of secret Swiss
accounts and shell companies. Mr. Dörig also was fined $125,000 and
Mr. Bachmann, $100,000.
Messrs. Bachmann and Dörig are two of eight former Credit Suisse
employees who have faced tax-evasion charges since 2011. The
Justice Department considers the others fugitives, an official
said.
The two men, both Swiss residents, flew to the U.S. for the
sentencing and were preparing to return immediately after, their
attorneys said.
The apparently lenient sentences--the men could have faced as
much as five years in prison--came with the blessing of the
prosecutor, Assistant U.S. Attorney Mark D. Lytle. Authorities
secured cooperation deals from the men last year, around the time
that the U.S. Justice Department faced criticism that huge banks
were "too big to jail."
Martin Lack, an executive at Swiss bank UBS AG, in May 2014 also
received five years' probation after pleading guilty to helping
U.S. account holders evade taxes.
Mr. Dörig had admitted to helping U.S. account holders funnel
money through shell companies, secret accounts and foundations to
keep it hidden from U.S. tax authorities.
Speaking haltingly, with a hearing-assistance device plugged
into his ears, Mr. Dörig apologized before the court. "I feel
deeply sorry for what I did," he said. "It will not be
repeated."
Judge Gerald Bruce Lee said Mr. Dörig could have faced a
lengthier sentence, but noted the septuagenarian's age and long,
successful career in finance as well as the fact that he isn't a
U.S. citizen. "It is sufficient," Judge Lee said.
Mr. Dörig's attorney, Robert Henoch of Kobre & Kim LLP, said
in an interview that Mr. Dörig had encouraged his U.S. clients to
disclose their overseas assets year earlier, after the Internal
Revenue Service offered those with hidden money a chance to come
clean. Still, he said, Mr. Dörig "was put through a four-year
ordeal."
"The system is clearly broken, stacked, and unfair to foreign
bankers and trust-company officials," Mr. Henoch said.
A spokeswoman said offshore enforcement is one of the Justice
Department's top priorities, noting that since 2009 that
prosecutors have charged more than 100 account holders with having
undeclared offshore accounts, along with dozens of facilitators and
financial institutions. Earlier this month, an Atlanta federal
court sentenced Internet entrepreneur Gregg Kaminsky to four months
in prison and two months of home confinement for using a UBS bank
account to hide income he earned in an online virtual world called
"Second Life."
Write to Joel Schectman at joel.schectman@dowjones.com
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