March 21,2024

Wyden Launches Investigation of Potential Ongoing U.S. Tax Evasion at Swiss Bank Pictet, Bank’s Deferred Prosecution Agreement

Committee Has Reviewed Evidence Regarding Suspicious Internal Transfers of $255M into Potentially Undisclosed Accounts; Pictet Recently Paid a Fine of Only $123M After Helping U.S. Citizens Conceal $5.6B in Secret Accounts

Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., today launched an investigation into the Geneva-based multinational bank Pictet to determine whether it is abetting tax evasion on an ongoing basis by a U.S. citizen under criminal investigation and whether this conduct is covered by the $123 million fine Pictet paid as part of its recent deferred prosecution agreement (DPA) with the Department of Justice. 

Committee investigators have reviewed evidence including bank records documenting highly suspicious transfers between Pictet accounts. That includes $255 million transferred out of accounts belonging to a U.S. billionaire and into accounts nominally owned by a known associate of the U.S. billionaire. However, evidence reviewed by the committee indicates that the U.S. billionaire retained effective control of the funds and continued to receive correspondence pertaining to the funds, including Foreign Account Tax Compliance Act document requests, well after transferring the funds to accounts that ostensibly belonged to his associate. Additionally, the billionaire continued to meet regularly in the U.S. with Pictet employees even after the original accounts in the U.S. billionaire’s name were emptied. 

U.S. citizens with offshore bank accounts are required to file an annual Report of Foreign Bank and Financial Accounts (FBAR) for any account with an aggregate value more than $10,000. If the U.S. citizen involved in the Pictet matter under investigation is found to have concealed $255 million in undeclared offshore accounts, it could result in one of the largest FBAR penalties in U.S. history, if not the largest. 

Senator Wyden wrote in a letter to Laurent Ramsey, Managing Partner of the Pictet Group: “I am seeking additional information to better understand whether the scope of the DPA’s admitted criminal conduct accurately reflects the full extent of Pictet’s illicit activity on behalf of U.S. clients. I also wish to better understand why Pictet only paid a paltry penalty of just $122.9 million, despite admitting to tax fraud involving over $5.6 billion worth of undeclared offshore accounts. The fine paid by Pictet is substantially smaller than that paid by other Swiss banks in the past for criminality involving multi-billion dollar tax evasion schemes…

“The Committee is currently in possession of documents concerning allegedly undeclared accounts at Pictet owned, maintained and/or controlled by U.S. citizen and resident (hereafter “Person 1”)…

“Specifically, according to bank records reviewed by the Committee, in 2013 a Pictet account maintained by Person 1 … received a deposit of $255 million. However, these bank records also show that the [redacted] account was subsequently zeroed out by the end of 2013, with Person 1 withdrawing the entirety of the $255 million from the account. The documents suggest that Person 1 arranged to transfer the $255 million from the [redacted] account he explicitly controlled to a different Pictet account held by a long-time friend and non-U.S. citizen [redacted] (hereafter “Person 2”)...

“Person 1 transferred hundreds of millions of dollars to accounts in Person 2’s name, yet, with the assistance of Pictet employees, appears to have maintained control of those accounts via his office in [redacted]. Even though Person 1 was no longer formally listed as the account holder or had signatory authority over the funds he sent to Person 2’s accounts, Pictet continued to direct inquiries and paperwork concerning the funds to Person 1 and his advisors.

“The Committee also received allegations that in 2014, several of Person 1’s in-house counsel and outside attorneys advised Person 1 to make a voluntary disclosure to the IRS related to the [redacted] account. Among these advisers was an individual who had previously served as a former senior official at the U.S. Department of Justice’s tax division. It is the Committee’s understanding that Person 1 declined to make a voluntary disclosure to the IRS, and that federal investigators from the Department of Justice and IRS Criminal Investigation eventually opened a criminal investigation into the matter…

“For any situation involving repeatedly undeclared accounts in excess of $250 million at Pictet, the FBAR penalty levied on an individual taxpayer could actually exceed $125 million, which alone would surpass the entire fine paid by Pictet regarding its role in the concealment of over $5 billion in undeclared offshore accounts. If true, the allegations against Person 1 and Person 2 could involve potentially the largest individual FBAR penalty in U.S. history.”

The full text of Senator Wyden’s letter to Pictet is available here

The investigation announced today continues Senator Wyden’s work examining the tax practices of the ultra-wealthy. Last month, Wyden released an investigation of the private placement life insurance industry, a tax shelter for the ultra-wealthy holding at least $40 billion. In 2023, Senator Wyden released the results of a two-year investigation that found the Swiss bank Credit Suisse complicit in ongoing tax evasion by ultra-wealthy U.S. citizens and followed up that investigation with four additional banks involved in the schemes. Other efforts, some ongoing, include investigations of private equity billionaire Leon Black’s tax planning and financial ties with Jeffrey Epstein, billionaire Republican donor Harlan Crow’s tax deductions related to his pleasure yacht and other financial dealings, the prevalence of millionaires getting away with failing to file tax returns, and the need to address the “buy, borrow, die” strategy with a Billionaires Income Tax