The Justice Department said Friday it reached a non-prosecution agreement with Zurich-based Swisspartners Group, which will pay $4.4 million in forfeitures and restitution and acknowledged helping American clients maintain undeclared bank accounts. The deal also has Swisspartners handing over the identities of 110 of its U.S. clients. In a legal filing, the Justice Department said methods used by the firm included selling insurance policies that were funded by assets held in undeclared Swiss accounts. Those accounts were held in the name of the insurance firm, helping conceal the owners' identities.
The deal marks the first such publicly disclosed agreement between the Justice Department and a Swiss firm dealing in insurance products that can be used by policyholders to conceal underlying assets from tax authorities, according to people familiar with the matter.
The Wall Street Journal reported in February that U.S. authorities had begun scrutinizing Americans' use of Swiss insurance products such as private placement life insurance to hide assets, and that a number of Swiss insurers including Swiss Life Holding AG had stopped serving U.S. clients with related products.
In a statement, Swisspartners Group parent company Liechtensteinische Landesbank AG said the agreement "conclusively" resolves the unit's U.S. tax issues. Liechtensteinische Landesbank said it would now resume efforts to sell Swisspartners.
The relatively recent move to clamp down on the use of insurance products to hide money in Switzerland comes several years after the effort to track down undeclared American money in the country began in earnest thanks to a deferred prosecution agreement between the Justice Department and Swiss banking giant UBS AG. UBS agreed in 2009 to pay $780 million to settle the matter.
UBS rival Credit Suisse Group AG is expected to reach a related settlement with the Justice Department that will amount to significantly more than $1 billion. Credit Suisse is one of about a dozen Swiss banks that have come under Justice Department investigation in recent years for allegedly aiding U.S. tax evasion.
In addition, hundreds of other Swiss banks have signaled they will participate in a Justice Department self-reporting program unveiled last year, which requires the banks to hand over information about their U.S. accounts in exchange for guarantees that they won't be prosecuted.