Credit Suisse pleads guilty to tax evasion, will pay $2.5 bn fine to U.S.

Credit Suisse agreed to pay a fine of more than $2.5 billion to the U.S. government and plead guilty to knowingly attempting to help some of its U.S. customers evade taxes, the Department of Justice announced Monday.

The agreement comes after lengthy negotiations with the DOJ, the Federal Reserve and New York State's Department of Financial Services.

This is the first time in almost two decades that a bank has admitted guilt in a U.S. penal case. In 1995, Japan's Daiwa Bank pleaded guilty to hiding losses from regulators.

In addition, the size of the fine for Switzerland's second-largest bank is the biggest in history in a U.S. tax case.

Credit Suisse, which is based in Zurich, created secret accounts abroad, hid information from regulators and "engaged in an extensive and wide-ranging conspiracy to help U.S. taxpayers evade taxes," U.S. Attorney General Eric Holder said.

He added that the felony conviction and fine should send a message that the U.S. government will not tolerate behavior of this kind and that no financial institution, regardless of its size or international standing, is above the law.

The fine is more than three times the size of the $780 million that UBS bank agreed to pay in 2009 for helping Americans evade taxes.

The huge Credit Suisse fine comes in addition to the $196 million the bank paid in a related case after the Securities and Exchange Commission accused the Swiss bank of providing services that it did not register with regulators.

A U.S. Senate investigation determined in February that the financial giant facilitated billions of dollars in tax evasion by its wealthiest U.S. customers by using tactics of doubtful legality between 2001 and 2008.

In 2006, Credit Suisse had about 22,000 accounts of U.S. customers valued at $13.5 billion, 95 percent of which were not registered with the Internal Revenue Service. Thus, the income earned in those accounts never came to the attention of the IRS.

As part of the deal, however, Credit Suisse managed to avoid having to provide names of its U.S. clients who allegedly used the bank to hide money from the IRS and U.S. banking regulators have agreed not to cancel the bank's license to do business in the United States.

Moreover, despite calls by Swiss politicians for the bank's top management to resign, CEO Brady Dougan and president Urs Rohner will remain in their positions at Credit Suisse.