How Banks Escaped Criminal Prosecution

The biggest Swiss banks have cut deals with the U.S., saved their top executives from prosecution. At least 21 financial advisers in Switzerland charged with aiding American tax dodgers are at large.
$2,000,000,000,000 Estimated value of cash and securities held by Swiss banks that customers haven’t declared to authorities in their home countries. Swiss banking system remains dirty: Zurich has come to resemble an oversize college dorm for indicted Swiss financial professionals.
Swiss authorities, however, have refused to hand over any bankers—and the U.S. hasn’t asked for them. At least 21 financial advisers in Switzerland under U.S. indictment remain at large, making them fugitives in the eyes of the American government. Their acts aren’t considered crimes under Swiss law, so the country won’t extradite or prosecute them. Several still work in the Swiss financial industry, offering tax advice and other services. Some still have U.S. clients.

For decades, Switzerland has occupied an outsize role in the world of shady international finance. The country’s strict secrecy laws have made it the offshore banking destination of choice for U.S. tax evaders, Russian oligarchs, Nigerian kleptocrats, and Brazilian money launderers. According to research by Gabriel Zucman, an assistant professor at the London School of Economics, Swiss banks still hold at least $2 trillion that customers haven’t declared to tax authorities in their home countries. “You’re not a self-respecting Swiss bank if you don’t have some dodgy money floating around your system,” says Martin Kenney, an attorney in the British Virgin Islands who specializes in international fraud.
Zurich offices of the Julius Baer Group, one of Switzerland’s largest private banks, are an unlikely place to find an alleged fugitive from American justice. And yet it’s here that I meet Fabio Frazzetto a longtime client adviser for the bank, charging him with conspiring to help dozens of wealthy Americans conceal hundreds of millions of dollars from the Internal Revenue Service by using undeclared accounts, code names, and foreign relatives.

CISAS TERRORISTS ARE NOT JUST FOREIGN TERRORISTS
https://www.emptywheel.net/2015/03/21/cisas-terrorists-are-not-just-foreign-terrorists/

The Cybersecurity Information Security Act collects information domestically to target terrorists if those so-called terrorists can be said to be hacking or otherwise doing damage to property. Significantly, as written, the bill doesn’t limit itself to targeting terrorists with an international tie. That’s important, because it essentially authorizes intelligence collection domestically with no court review. Thus, the bill seems to be — at least in part — a way around Keith, the 1971 ruling that prohibited domestic security spying without a warrant.
The bill doesn’t limit itself to targeting terrorists with an international tie. That’s important, because it essentially authorizes intelligence collection domestically with no court review. Thus, the bill seems to be — at least in part — a way around Keith, the 1971 ruling that prohibited domestic security spying without a warrant.

Have the Banks Escaped Criminal Prosecution because They’re Spying Surrogates?
March 21, 2015 | By @emptywheel

https://www.emptywheel.net/2015/03/21/have-the-banks-escaped-criminal-prosecution-because-theyre-spying-surrogates/

excerpt:

First, when asked why she, along with Main Justice’s Lanny Breuer, authorized the sweetheart deal for recidivist transnational crime organization HSBC, Attorney General nominee Loretta Lynch implied that there was insufficient admissible evidence to try any individuals associated with this recidivism.

I and the dedicated career prosecutors handling the investigation carefully considered whether there was sufficient admissible evidence to prosecute an individual and whether such a prosecution otherwise would have been consistent with the principles of federal prosecution contained in the United States Attorney’s Manual.

That’s surprising given that Carl Levin managed to come up with 300-some pages of evidence. Obviously, there are several explanations for this response: she’s lying, the evidence is inadmissible because HSBC provided it willingly thereby making it unusable for prosecution, or the evidence was collected in ways that makes it inadmissible.

It’s the last one I’ve been thinking about: is it remotely conceivable that all the abundant evidence against banksters their regulators have used to obtain serial handslaps is for some reason inadmissible in a criminal proceeding?

I started thinking about that as a real possibility when PCLOB revealed that Treasury’s Office of Intelligence and Analysis has never once — not in the 30-plus years since Ronnie Reagan told them they had to — come up with minimization procedures to protect US person privacy with data collected under EO 12333. Maybe that didn’t matter so much in 1981, but since 2004, Treasury has had an ever-increasing role in using intelligence (collected from where?) to impose judgments against people with almost no due process. And those judgements are, in turn, used to impose other judgments on Americans with almost no due process.

The thing is, you'd think banks might care that Treasury wasn't complying with Executive Branch requirements on privacy protection. Not only because they care (ha!) about their customers, whether American or not, but because many of them are, themselves, US persons. US bank US person status should limit how much Treasury diddles with bank-related intelligence, but Treasury doesn't appear bound by that.

Which leads me to suspect, at least, that there’s something in it for the banks, something that more than makes up for the serial handslaps for sanctions violations.

And one possibility is that because of the way this data is collected and shared, it can’t be used in a trial. Voila! Bank immunity.

The actual settlement, however, made mention of it by explaining that HSBC had “assisted the Government in investigations of certain individuals suspected of money laundering and terrorist financing.” By dint of that cooperation, in other words, HSBC went from being a material supporter of terrorism to being a deputy financial cop. And Breuer expanded that notion of banks serving as deputized financial cops thereafter.

Deferred Prosecutions: Not Going After Companies If They Promise To Behave : NPR
http://www.npr.org/2015/03/24/394897368/not-prosecuting-companies-if-they-promise-to-behave

2015 Swiss, EU initial pact to swap tax data from 2018
They have 2 more years to hide the money
http://www.reuters.com/article/idUSKBN0MF16220150319
Switzerland is the world's biggest offshore wealth management center, just ahead of Singapore.

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