Julius Baer settles with US as advisers plead guilty

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Julius Baer, the Zurich-based private bank, said today that it has reached a final settlement with the US Justice Department, after two of its advisers pleaded guilty on Thursday in New York to helping American clients to avoid US taxes.

In a statement, the bank said it had entered agreed to pay the “previously communicated amount” of US$547.25m, in connection with its “legacy US cross-border private banking business”.

“In addition, the two Julius Baer employees indicted in this context have taken an important step towards a resolution of their cases,” the statement said.

The advisers, Daniela Casadei and Fabio Frazzetto, had been charged by the US authorities in 2011 with defrauding the Internal Revenue Service, evading income taxes, and filing false returns. They will be sentenced in August, and face a maximum sentence of five years in prison.

The settlement was a so-called deferred prosecution agreement, under which a company’s record can be wiped clean if it meets certain conditions, including paying the amount specified by the court.

Julius Baer chairman Daniel J Sauter said the settlement had been reached as a result of a “constructive dialogue and cooperation with the US authorities”. Julius Baer chief executive Boris Collardi added that being able to close at last “this regrettable legacy issue is an important milestone for Julius Baer” and that the resolution would allow Julius Baer “to again fully focus on the future and our business activities”.

Bank Julius Baer & Co. marked its 125th anniversary in 2015, and is the principal operating company of Julius Baer Group. It currently looks after client assets of around CHF385bn (US$388.1bn, £267.2bn), including around CHF300bn in assets under management.

To read the Julius Baer statement on the company’s website, click here.  To read the statement of the US District Attorney in the case,  click here.