Bank La Roche and US Justice Department reach Agreement

The United States Justice Department announced last month that Bank La Roche & Co AG has reached a resolution under the department’s Swiss Bank program.  The Swiss Bank program, which was established in 2013, provides a path for Swiss banks to resolve potential criminal liabilities in the United States.  Banks meeting certain requirements are eligible for non-prosecution agreement. 

Bank La Roche to Avoid U.S. Criminal Charges

According to the terms of the non-prosecution agreement signed today, La Roche agrees to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay penalties in return for the department’s agreement not to prosecute this bank for tax-related criminal offenses.
La Roche was founded in 1787 and is based in Basel, Switzerland, with offices in Olten and Bern, Switzerland.  In 2011, La Roche closed a Hong Kong asset management subsidiary that opened in 2008.  On Feb. 13, 2015, La Roche sold its business to Notenstein Privatbank AG.  Most of La Roche’s employees and the clients of La Roche, with the exception of U.S. taxpayers and a few other clients, will be transferred to Notenstein Privatbank AG.  The transaction is expected to close in October 2015.  Thereafter, La Roche intends to wind down its remaining business and relinquish its banking license.  La Roche assisted some U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income the clients held in their accounts from the Internal Revenue Service (IRS).

Implications for Individuals with Bank La Roche Accounts

Due in part to the assistance of La Roche and its personnel, and with the knowledge that Swiss banking secrecy laws would prevent La Roche from disclosing their identities to the IRS, some U.S. clients of La Roche filed false and fraudulent U.S. Individual Income Tax Returns (IRS Forms 1040), which failed to report their interests in their undeclared accounts and the related income.  Some of La Roche’s U.S. clients also failed to file and otherwise report their undeclared accounts on Reports of Foreign Bank and Financial Accounts (FBARs).

If you have an account at Bank La Roche – or any other offshore financial institution, now is the time to get into compliance with the IRS and the U.S. Justice Department.  Please contact us for a free, confidential, and no obligation consultation to discuss your financial situation.