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Scott Michel Comments on Credit Suisse Tax Deal

May 6, 2014, Bloomberg

Bloomberg spoke with Scott D. Michel concerning Credit Suisse being close to resolving a U.S. tax-evasion probe with an agreement that might include a penalty of more than $1 billion, after creating a separate entity last year to house the businesses involved.  The resolution of the investigation may also include a guilty plea, according to a person familiar with the talks.  For the complete story, please visit Bloomberg's website.

Excerpt taken from the article.

The Justice Department, cracking down on foreign banks that help Americans cheat the Internal Revenue Service, may charge the unit instead of the whole firm, said Scott Michel, a tax lawyer at Caplin & Drysdale in Washington. Prosecutors, who must weigh economic consequences when taking action, have expressed concern about the potential fallout from charging big banks.

"It has the earmarks of a structural step that somebody has thought of to try to protect the bank as a whole in the event that a guilty plea is required," Michel said. "I've had a couple of criminal tax cases over the years where the client created a corporate entity to enter a guilty plea."

"The U.S. wants Credit Suisse to pay money, acknowledge wrongdoing and accept responsibility, and take certain steps to ensure that similar conduct doesn't occur in the future," Michel said. "They'll want Credit Suisse to cooperate in any investigation by the Justice Department and IRS of any clients and of its own bankers and management."


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