BY CARLA MAIN, BDlive
NEW JERSEY — Rothschild Bank, the Zurich-based private bank of the Rothschild financial dynasty, has become the latest Swiss bank to be fined by the US justice department for helping Americans conceal assets offshore.
The firm, overseen by Baron David de Rothschild and majority-owned by Paris Orleans, would pay a penalty of $11.5m, the department said on Wednesday.
Banca Credinvest, with headquarters on Lake Lugano, had agreed to pay $3m, it said.
The two banks join seven other Swiss firms that have settled with the US on condition that they reveal how they used shell companies and bank secrecy to conceal undeclared assets. More than 100 firms entered the programme at the end of 2013.
Rothschild Bank, which had US-related accounts with an aggregate balance of a maximum $1.5bn, knew it was "highly probable" that some clients did not comply with income tax and reporting obligations, and that some were hiding behind sham entities in Liechtenstein, Panama and the British Virgin Islands, the justice department said.
Rothschild closed 296 accounts of US taxpayers from August 1 2008, to the end of 2013, and encouraged customers to disclose undeclared assets to the US Internal Revenue Service. It had also obtained waivers from some former US clients to circumvent Swiss secrecy laws that normally prohibit banks from giving client names to foreign authorities, the justice department said.
"Rothschild Bank is pleased to reach this agreement … because this brings this historical matter to a conclusion," company spokesman Kilian Borter said.
On an unrelated front, prosecutors investigating Brazil’s largest corruption scandal said they had notified the US of evidence that at least four foreign companies had paid bribes to win Petrobras contracts. The allegations were against units of Samsung Heavy Industries, Skanska, AP Moeller-Maersk and Toyo Engineering, senior prosecutor Carlos Lima said.
Companies might face charges in Brazil that would restrict local operations and possible sanctions under the US Foreign Corrupt Practices Act, he said last week.
Samsung Heavy Industries "has not been contacted by any law enforcement authorities regarding this issue", the South Korean company said. Toyo and its Brazilian affiliate "are entirely unrelated to the bribery scandal of Petrobras", the Japanese company said.
Maersk said bribes were strictly forbidden for any employee or third party, that commissions were paid within industry norms, and that it had found no indication of improper activity. The Danish company had not been contacted by authorities.
Skanska said it had zero tolerance for unethical business practices and is investigating internally.
Petrobras, which prosecutors see as a victim of individual executives, is controlled by the state and its employees are deemed to be public officials. The US department of justice declined to comment on its role in the investigation. Petrobras did not reply to requests for comment.
In other news on bank settlements with regulators, a trader fired by Deutsche Bank as part of its London interbank offered rate rigging settlement with the New York Department of Financial Services is suing the bank over bonus payments that may total more than £5m.
Yves Paturel filed the suit along with a second trader, Gavin Black, in a London court in January, according to the filing, made available by the court on Wednesday. The pair were dismissed in April. Black has withdrawn his claim.