For the first time in nearly 20 years, a major bank will actually plead guilty to criminal wrongdoing. Credit Suisse will pay $2.5 billion as part of a plea agreement with the U.S. government for helping American citizens use the bank to avoid paying taxes, reports Bloomberg.
The U.S. government filed the charge as a criminal information — which indicates that a plea deal has been reached — in a federal court in Virginia today. The bank is expected to plead guilty during an agreement hearing scheduled for 5:30 p.m. in Alexandria today.
Generally, massive banks avoid admission of guilt (and costly trials) in criminal cases by agreeing to settlements, which generally allow them to pay fines without acknowledging any illegal activity. According to the New York Times, federal prosecutors in the case demanded that Credit Suisse plead guilty as "a sign that global banking giants are no longer immune from criminal charges." The Times offers some more detail:
As part of a deal that the Justice Department is expected to announce, the Swiss bank agreed to plead to one count of conspiring to aid tax evasion. Credit Suisse, which has a giant investment bank in New York and whose chief executive is an American, will also pay about $2.6 billion in penalties and hire an independent monitor for up to two years.
Wealthy Americans (and other nationalities) have long stored their dollars in elusive Swiss accounts to avoid paying taxes in the States — a practice that has, obviously angered U.S. lawmakers. The Times reports that the team of prosecutors leading the case against Credit Suisse took months to plan their approach, ensuring that the bank would not be able to avoid a guilty plea — but also ensuring that the punishment did not cripple the bank in the process.