UBS Group AG was asked by a powerful U.S. lawmaker about whether the bank it acquired, Credit Suisse Group AG, failed to report an American accused of evading taxes on $350 million in income.
Senator Ron Wyden, chairman of the Senate Finance Committee, asked in a letter whether Credit Suisse told U.S. tax authorities about accounts held by Douglas Edelman, a former military contractor who sold $7 billion of jet fuel to the U.S. for use in military campaigns in Afghanistan and the Middle East.
Edelman and his wife, Delphine Le Dain, were accused in an indictment unsealed July 3 of hiding his profits from the Internal Revenue Service for nearly two decades in one of the largest tax evasion schemes in U.S. history. He was arrested that day in Spain and faces extradition to the U.S., the Justice Department said at the time.
The indictment offers "substantial new evidence that Credit Suisse and its employees played a significant role facilitating Edelman's alleged criminal tax conspiracy," Wyden, an Oregon Democrat, said in the letter sent Wednesday to UBS Chief Executive Officer Sergio Ermotti.
U.S. Probe
Wyden's letter came as the Justice Department investigates whether Credit Suisse helped Americans hide assets from the IRS despite pledging to end the practice a decade ago. In a high-profile case, Credit Suisse pleaded guilty in 2014, paid $2.6 billion and admitted it helped thousands of Americans evade taxes.
Under the plea deal, Credit Suisse agreed to identify undeclared accounts to the IRS.
Last year, Wyden's committee said that since 2014, the bank identified "thousands of previously undeclared accounts" valued at more than $1.3 billion. That included about two dozen with accounts of $20 million or more.
A spokesperson for UBS, which completed its acquisition of Credit Suisse last year, declined to comment. The Zurich-based bank has said that it was cooperating with U.S. authorities on identifying potentially undeclared U.S. assets held by Credit Suisse clients.
U.S.-based attorneys for Edelman and Le Dain declined to comment. A Justice Department spokesman also declined to comment.
In his letter, Wyden asked Ermotti for "an updated number of previously undeclared accounts and the value of those accounts." It also asked Ermotti to "explain in detail what actions Credit Suisse employees took in relation to Edelman's accounts upon learning that Edelman had failed to disclose his accounts to US authorities, as required by U.S. law."
