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Butterfield Bank Cracks Under Pressure, Agrees to Pay $5.6 Million
A scandal-plagued bank in Bermuda has agreed to pay $5.6 million to settle a tax evasion investigation, according to a press release from the Manhattan U.S. Attorney’s Office. Bank of N.T. Butterfield & Son Limited (BUTTERFIELD) has been accused of assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from 2001 through 2013.
According to the investigation, BUTTERFIELD helped its clients conceal their ownership of foreign bank accounts to avoid their U.S. tax obligations. The bank allegedly used sham entities to funnel money between U.S.- and Cayman Islands-based accounts.
The agreement requires BUTTERFIELD to forfeit $4.896 million to the United States, representing certain fees that it earned by assisting its U.S. taxpayer-clients in opening and maintaining these undeclared accounts, and to pay $704,000 in restitution to the IRS, representing the approximate unpaid taxes arising from the tax evasion by BUTTERFIELD’s U.S. taxpayer-clients.
Manhattan U.S. Attorney Audrey Strauss said, “Butterfield admits to helping its clients conceal their ownership of foreign bank accounts to avoid their U.S. tax obligations. The resolution of this matter through a non-prosecution agreement, along with forfeiture and restitution, reflects Butterfield’s cooperation in our investigation and demonstrates that cooperation, including assistance in providing U.S. taxpayer client files, has tangible benefits. We will continue to pursue financial services firms around the world that help their clients evade U.S. taxes.”
As part of the agreement, BUTTERFIELD has admitted to various facts concerning its wrongful conduct and the remedial measures that it took to cease that conduct. The bank acknowledged that it helped certain U.S. taxpayer-clients conceal from the IRS their beneficial ownership of undeclared assets maintained in foreign bank accounts.
BUTTERFIELD has also agreed to turn over account files relating to U.S. taxpayer-clients who maintained undeclared assets overseas. This agreement marks yet another significant step forward in combating offshore tax evasion.
BUTTERFIELD’s cooperation with the investigation has been recognized, and the bank has implemented remedial measures to stop assisting U.S. taxpayers evading federal income taxes. The non-prosecution agreement requires BUTTERFIELD to cease all activities that could be used to evade U.S. taxes.
Defendant: Bank of N.T. Butterfield & Son Limited
Criminal Charges: Assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts
City and State: New York
Exact Date: Not specified
Sentence or Outcome: BUTTERFIELD agreed to pay $5.6 million, forfeit $4.896 million, and pay $704,000 in restitution
Dollar Amounts: $5.6 million, $4.896 million, $704,000
Key Facts
- State: New York
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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