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Swiss Life Agrees to Pay $77.3 Million to Settle Criminal Tax-Avoidance Charges

Ruth Singleton
Published Date:
May 14, 2021


Swiss Life Holding AG and several subsidiaries have admitted to conspiring with U.S. taxpayers to conceal more than $1.452 billion in offshore insurance policies from the IRS, the U.S. Department of Justice announced today. The company has agreed to enter into a deferred prosecution agreement and to pay approximately $77.3 million to the U.S. Treasury, which includes restitution, forfeiture of all gross fees and a penalty.

Under the agreement, filed in Manhattan federal court, Swiss Life must continue to cooperate fully with ongoing investigations and affirmatively disclose any information it may later uncover regarding U.S.-related insurance policies and related policy investment accounts.

According to documents filed in court, the Swiss Life subsidiaries, starting in 2008, knew that UBS and other Swiss banks were terminating or reevaluating their business relationships with U.S. clients in response to increasing offshore tax enforcement efforts by U.S. authorities. These subsidiaries viewed this situation as a business opportunity to expand their private placement life insurance (PPLI) business by taking on U.S. clients who were fleeing UBS and other Swiss banks. According to the DOJ, “Such clients with undeclared assets were typically referred within Swiss Life as ‘non-comprehensive advice seeking.’ … Because Swiss Life would be identified as the owner of the policy investment accounts, rather than the U.S. policyholder and/or ultimate beneficial owner of the assets, the insurance wrapper policies could be and were used by unscrupulous U.S. taxpayers to hide undeclared assets and income and to evade taxes. In turn, Swiss Life grew its PPLI business and earned fees on those policies.”

“Swiss Life today is held responsible for creating and marketing specially designed insurance products to U.S. tax evaders seeking a new way to hide their offshore assets, in light of heightened Justice Department and IRS tax enforcement efforts,” said Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division. “Financial enablers here and abroad—and the taxpayers seeking their service—should know that we will continue to identify and unmask such schemes.”

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