February 19, 2016
Milan prosecutors are probing whether Credit Suisse Group AG engaged in money laundering and evaded taxes when it sold billions of euros of insurance policies that clients from Italy used to shield funds from tax authorities, people with knowledge of the case said.
Starting in 2005, Credit Suisse allegedly helped about 4,000 clients protect as much as 8 billion euros ($8.9 billion) of funds that were earned illicitly, mainly as income that was undeclared to Italian tax authorities, said the people, who asked not to be identified because the probe isn’t public.
Clients were sold insurance policies issued by Lichtenstein and Bermuda subsidiaries of the bank, the people said. The scheme enabled them to skirt a Swiss withholding tax on deposits in foreign-held accounts while retaining access to their cash, which they could still manage from Swiss accounts, said the people.