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Categorized | Banks

Credit Suisse executives clashed on tax probe

Posted on April 30, 2014

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The former head of Credit Suisse’s private bank for the Americas told government investigators he had clashed with superiors about the bank’s disclosures to a tax evasion probe, said people with direct knowledge of the situation.

The claim suggests there was disagreement at senior levels of Credit Suisse over its handling of an investigation for which it has set aside almost $1bn for legal provisions. The bank has not settled with investigators, and still faces the threat of criminal charges.

    Internal emails seen by the FT support the claim by Anthony DeChellis, who had met the US Department of Justice and a Senate subcommittee on the bank’s behalf once before. His decision to take his concerns to investigators came in April 2013, shortly after he was told the bank wanted to move him from his job.

    Mr DeChellis was concerned the documents showed that the alleged tax evasion efforts spread beyond a small group of former bankers whom Credit Suisse blamed for the misdeeds.

    This February, the Senate permanent subcommittee on investigations accused Credit Suisse of helping more than 22,000 US clients avoid US taxes. The emails show Mr DeChellis raised concerns a year earlier about what he believed were new documents related to US-linked accounts.

    On February 27 last year, he asked his assistant to set up a meeting with Pierre Gentin, global head of litigation, “to discuss Valentina,” the code name for the bank’s internal investigation.

    On March 4 he met Mr Gentin, who notified outside counsel of their meeting, people familiar with the matter said. That day, Mr DeChellis was told he was being reassigned in a previously scheduled meeting with Robert Shafir, co-head of private banking.

    In April, Mr DeChellis told DoJ officials he had advised colleagues that he wanted to notify authorities immediately about the documents, people with knowledge of the matter said.

    On March 5, when Credit Suisse said Mr DeChellis was stepping down, it expressed gratitude for “his leadership, integrity and partnership in growing this business and positioning it well for the future.” Instead of taking a new role, he resigned, leaving in September.

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    In response to inquiries from the FT, the bank said this week that Mr DeChellis’s exit related to performance and a long-planned reorganisation. “Due to the historic underperformance of the business, Credit Suisse, well before March 2013, decided to change management in Private Banking Americas,” it said.

    A lawyer for Mr DeChellis declined to comment, as did the DoJ and Senate committee. The bank declined to make executives available for comment.

    The documents “contained no new US client accounts,” Credit Suisse added, a claim disputed by others with direct knowledge of them. “The documents had been previously reviewed and relevant material already produced to US authorities,” it said. “Nonetheless, we reviewed the documents again and reconfirmed that they contained no new US client accounts.”

    The bank offered more resources to review the documents but this did not satisfy Mr DeChellis, said people familiar with the matter and emails.

    The dispute over the documents followed tensions between the Americas private bank and management in Switzerland, documented in the Senate report and emails, which show wider friction between silos within the bank’s New York and Zurich operations.

    Starting in 2012, Mr DeChellis was one of several Americas executives who questioned moves by private bank co-head Hans-Ulrich Meister and chief operating officer Rolf Bogli to reclassify some assets from the Americas to the business in Switzerland, a practice criticized by the Senate subcommittee.