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Case 1:14-cr-00188-RBS Document 14 Filed 05/19/14 Page 1 of 16 PageID# 36 I fN THE UNITED STATES DISTRICT COURT FOR Tt EASTERN DISTRICT OF VIRGIN IA Alexandria Division UN ITED STATES OF AMER ICA ) ) V. ) CR IMfNAL NO . I :14-CR-12'8' ) CREDIT SUISSE AG, ) ) Defendant. ) STATEMENT OF FACTS The patties stipulate that the allegations in Count One of the Infonnation and the follow ing facts are true and correct, and that had the matter gone to trial the United States would have proven them beyond a reasonable doubt: I. CREDIT SUISSE AG, a corporation organized under the laws of Switzerland, directly and through its parent, subsidiaries and affiliates, operates a global financial services business in more than 50 countries with over 45,000 emp loyees, including 9,000 U.S. employees. In the Un ited States, CRED IT SU ISSE operates as a Financial Holding Company regulated by the Federal Reserve. CREDIT SUISSE offers pri vate banking and wealth management services to over two milli on clients, focusing on ultra-high­ net-worth and hi gh-net-worth individual clients around the globe, including U.S. citizens, legal permanent residents, and resident aliens, located within the Eastern District of Virginia and elsewhere. 2. Clariden Leu Ltd. ("Ciariden Leu") was a private Swiss bank and one of CREDIT SUISSE's who ll y owned subsidiaries. Tt offered private banking and wealth management services that paralleled and often competed with the private wealth management services offered by CRED IT SU ISSE. CREDIT SUISSE formed Clariden Leu on January 26, 2007, by merging four private banks that CREDIT SUISSE wholly owned, Clariden Bank, Bank Leu, Bank Hofmann, and BGP Banca eli Gestione Patrimoniale, with Credit Suisse Fides, the securities dealer that CREDIT SU ISSE wholly owned. Clariden Leu was one of the largest private banks in Switzerland and ultimately managed more than I00 bill ion Swiss francs. CREDIT SUISSE merged with Clariden Leu on Apr il 2, 2012, acquiring al l ofClariden Leu's assets and liabilities and assuming all of its rights and obligations. 3. Unless otherwise specificall y noted herein, CRED IT SU ISSE AG, its parent, and Switzerland-based subsidiaries and affiliates, including Clariden Leu, col lectively will be cal led "CREDIT SU ISSE." Case 1:14-cr-00188-RBS Document 14 Filed 05/19/14 Page 2 of 16 PageID# 37 U.S. INCOME TAX & REPORT ING OBLIGATIONS 4. U.S. citizens, res ident aliens, and lega l permanent residents have an obli gation to report all income earned from foreign bank accounts on their tax returns and to pay the taxes due on that income. For the tax yea r 1976 forward , U.S. citi zens, res ident aliens, and legal pennanent res idents had an obligation to report to the Internal Revenue Service (" LRS ") on the Schedul e B of a U.S. Incliviclual Income Tax Return, Fonn I0 40, whether that indi vidual had a fin ancial interest in, or signature authority over, a fin ancial account in a foreign country in a particul ar year by checking "Yes" or "No" in the appropriate box and identifying the country where the account was maintained. 5. From in or about 1970 forward, U. S. citizens, res ident ali ens, and legal permanent residents who had a financial interest in, or signature authority over. one or more financial accounts in a foreign country with an aggregate value of more than $ 10,000 at any time during a particular year were required to fil e with the Department of the Treasury a Report of Foreign Bank and Fin ancial Accounts, f orm TO F 90-22. 1 (the "FBAF R"). The BAR fo r the appli cabl e year was due by June 30 of the fo llowing year. 6. An "undeclared account" was a fin ancial acco unt owned by an individual subject to U.S. tax and maintained in a foreign country that had not been reported by the indi vidual account owner to the U.S. government on an income tax return and an FBAR. 7. From in or about the 1930s until the present, Switzerland has maintained laws that ensure the secrecy of cli ent relationships at Swiss banks. Swiss law prohibi ts the disclosure of identi fy ing information without the client's authorization, especially to foreign government investigators. These are Swiss criminal laws puni shed by imprisonment. Because of the secrecy guarantee that they created, these Swiss criminal prov isions enabled U.S. clients to concea l their Swiss bank accounts from U.S. authorities. OVERVIEW OF THE ILLEGAL U.S. CROSS-BORDER BUSINESS 8. For decades prior to and through in or about 2009, in the Eastern District of Virginia and elsewhere, CREDIT SU ISSE did unlawfull y, vo luntaril y, intentionall y, and knowingly conspire, combine, confederate, and agree together with others to commit the following offense aga inst the United States: to willfully aid, assist in , procure, counsel, and advise the preparati on and presentation of false income tax returns and other documents to the Internal Revenue Service of the Treasury Department, in violation of Title 26, United States Code, Section 7206(2), all in violation ofTitle 18, United States Code, Section 371. 9. For decades prior to and through in or about 2009, CREDIT SU ISSE operated an illegal cross-border banking business that knowingly and willfully aided and assisted thousands of U.S. clients in opening and maintaining undeclared accounts and 2 Case 1:14-cr-00188-RBS Document 14 Filed 05/19/14 Page 3 of 16 PageID# 38 concealing their offshore assets and income from the fRS. CREDIT SU ISSE, through certa in of its managers, emp loyees, and others, so licited U.S. cl ients to open undeclared accounts because Swiss bank secrecy would permit them to conceal the U.S. clients' ownership of accounts at CREDIT SUISSE. CRED IT SU ISSE used a variety of means to assist U.S . clients in conceal ing their CREDIT SU ISSE undeclared accounts, including by: assisting clients in using sham emities as nominee beneficial owners of the undeclared accounts; so licit ing IR S forms that falsely stated under penalties of pe1jury that the sham entiti es beneficially owned the assets in the accounts; failing to maintain in the United States records related to the accounts; • destroying account records sent to the United States for client review; • using CRED IT SU ISSE managers and employees as unregistered investment adv isors on undeclared accounts; faci litating withdrawals of funds from the undeclared accounts by either providing hand-delivered cash in the United States or using CREDIT SU ISSE's correspondent bank accounts in the United States; structuring transfers of funds to evade currency transaction reporting requirements; and providing offshore cred it and debit cards to repatriate funds in the undeclared accounts. I 0. Private bankers (referred to as Relationship Managers or RM s) served as the primary contact for U.S. clients with undeclared accounts at CRED IT SU ISSE. Managers (including Supervisory RMs) and RM s (co llectively hereafter "managers.. ) in the illegal U.S. cross-border business actively assisted or otherwise facilitated thousands of U.S. individual taxpayers in estab lishing and maintaining undeclared accounts in a manner designed to conceal the U.S. taxpayers' ownership or beneficial interest in sa id accounts. CRED IT SU ISSE maintained correspondent bank accounts in the United States through wh ich CRED IT SU ISSE managers and others conducted financial transactions in furtherance of its illegal cross-border business. II. As of 2006, CRED IT SU ISS E had approximately 22,000 U.S. client accounts with total aggregate nssets under management of approximately $10 billion, which included both declared and undeclared accounts. CREDIT SUISSE maintained undeclared accounts for U.S. clients in different units throughout the bank, but primarily serviced them from various desks located in Zurich and Geneva, Switzerland, including a desk at the Zurich airport. CREDIT SU ISS E's Switzerland-based North America 3 Case 1:14-cr-00188-RBS Document 14 Filed 05/19/14 Page 4 of 16 PageID# 39 International desk, internally referred to as "SALN ," employed about 15-20 Swiss­ based RMs focused on U.S. resident clients. 12. From in or about 1999 to in or about 2009, certain managers, with the assistance of the Representative Officer, used CREDIT SU ISSE's Representative Office in New York, New York to assist U.S. cl ients filing fal se and fraudulent U.S. tax reporting documents, including income tax returns. 13. In or about 2005, CREDIT SU ISSE made a fil ing with the Federal Reserve Bank of New York that concealed these managers' conduct in support of the tax evasion scheme by stating that its policies required that if the Representative Officer were asked about opening accounts, he "must dec line the Customer's request ... [i)f the client indicates that he/she intends to avo id paying taxes," as "[i]t is the policy of Credit Suisse not to provide assistance in the evasion of taxes." Likewise, in or about 2007, CREDIT SUISSE made another filin g with the Federal Reserve that stated that, under CREDIT SUISSE policy fo r the Representative Office, "employees must not engage in activity that cou ld be viewed as knowingly assisting a cl ient in ... misleading local or foreign authorities or any tax authority by means of incomplete or mi ss ing information." 14. Approximately 430 CREDIT SUISSE non-SALN RMs employed on other desks or at other Swiss-based offices of CREDIT SU ISSE also serviced the accounts of U.S.

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