Swiss Banks Report Hidden Accounts

ZURICH—The U.S. Justice Department said Tuesday two more Swiss banks have completed the self-reporting program for hidden American accounts, including the Swiss unit of Socié té Gé né rale SA, resulting in more than $22 million in penalties.

Socié té Gé né rale Private Banking SA maintained undeclared accounts in the name of "sham entities" for U.S. clients, the Justice Department said, and opened accounts for Americans who had left Zurich-based UBS AG after Switzerland's biggest bank came under U.S. scrutiny for aiding tax evasion several years ago. Socié té Gé né rale's Swiss bank will pay a $17.8 million penalty, according to the statement.

A spokesman for Socié té Gé né rale declined to comment.

In addition, Berner Kantonalbank AG, a publicly backed, 181-year-old lender in the canton of Bern, also opened and maintained undeclared accounts for Americans, the Justice Department said. Berner Kantonalbank had about 720 U.S. accounts since August 2008, the Justice Department said, with roughly $176.5 million in assets. The bank will pay a penalty of $4.6 million.

Berner Kantonalbank said that its business with U.S. clients is "marginal," and that the penalty will have no impact on its earnings this year.

Banks in the Justice Department's program are required to hand over information about their U.S. accounts but not the identities of clients, which are protected under Switzerland's bank secrecy laws. The banks pay penalties based on the amount of undeclared U.S. money determined to be on their books minus amounts included in accounts that clients voluntarily disclose, with the bank's encouragement.

In exchange for completing the program, the banks receive guarantees that they won't be criminally prosecuted for aiding tax evasion. The Justice Department unveiled its program in 2013, and has announced that 11 Swiss banks have completed the process.

Separate from those in the program, a handful of Swiss banks remain under Justice Department investigation for allegedly aiding U.S. tax evasion.

Write to John Letzing at [e-mail]

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