St. Gallen (APA/sda) – Numbered accounts, code names, "hold mail", foundations in the Principality of Liechtenstein: A report by the US Department of Justice shows how Vadian Bank and external asset managers enabled American clients to hide their money from the US taxman.
The May 2015 non-indictment agreement between Vadian and the U.S. Department of Justice is available at www.justice.gov published. This includes a "Statement of Facts," a detailed account of Vadian Bank's activities from the perspective of U.S. authorities.
Accordingly, it was common for U.S. clients to have foundations established and managed in the Principality of Liechtenstein by third parties. These in turn opened accounts at Vadian Bank in the name of the foundation. Sometimes also transferred existing accounts from other Swiss banks.
Vadian did nothing to determine whether such legal entities were taxable in the U.S., the report says. Vadian had known that US persons were the real beneficiaries. In some cases, the bank's foundations would have filed U.S. tax forms with false information.
"Banker Number 1," head of private banking at Vadian, had served primarily as a contact for U.S. clients with undeclared accounts. Prior to mid-2008, Vadian had just two accounts related to the U.S. with a total of 100.000 dollars (about 88.000 euros), there were later up to 74 accounts with a total of 76 million euros. Dollar.
52 accounts were introduced and managed by outside money managers at Vadian, according to the "Statement of Facts". They received commissions for them. In 2009, "asset manager number 2" introduced more than 15 accounts with US connections to Vadian. Some of the accounts originated from a major Swiss bank that was targeted by U.S. justice in 2008.
Vadian also offered a range of traditional Swiss banking services suitable for helping U.S. clients evade taxes. This included "Hold Mail": for fees, Vadian withheld email correspondence to avoid traces to clients in the U.S.
The holders of numbered accounts were known only to a few employees, even within the bank. Code names were sometimes used to ensure the highest level of discretion – and this, too, was done for a fee. The bank also issued series of checks, the amounts of each of which were less than 10.000 dollars, so that the individual transactions were not subject to reporting requirements.
Founded in 1811 as the "Savings Institution of the City of St. Gallen," for 195 years the bank had limited itself almost exclusively to business with savings deposits, mortgages and small business loans. At the beginning of 2007, the "Ersparnisanstalt" became the "Vadian Bank" with the legal form of a joint stock company.
Under new management, Vadian moved into private banking for high net worth individuals in Liechtenstein and abroad, in addition to its traditional businesses. The expansion was initially successful. According to the "Statement of Facts", US-American clients were also deliberately acquired, who concealed their Swiss accounts from the tax authorities in their home country.
The management of Vadian was of the opinion that as a bank without a branch in the U.S., it would be possible to acquire U.S. customers from whom major Swiss banks were divesting themselves. But pressure from the USA increased. In mid-2013, Switzerland and the United States signed an agreement to settle the tax dispute.
By the end of 2013, 106 Swiss banks, including Vadian Bank, turned themselves in to U.S. authorities for possible aiding and abetting tax evasion. To avoid prosecution in the U.S., banks had to pay fines.