Credit Suisse (CS) Faces Tax Fraud & Money Laundering Probes

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Credit Suisse Group AG CS is facing money-laundering and tax-evasion investigations involving thousands of account holders. In addition to the homeland, the investigation covers the Netherlands, Britain, Germany, France and Australia.

The probes were triggered after FIOD, the Dutch office for financial crimes prosecution, got a tip off. The informers had suspected that various account holders had deposited millions of euros in Swiss banks without giving any notice to the concerned authorities. However, the name of the bank was not disclosed.

The Netherlands' Fiscal Information and Investigation Service said that the Dutch authorities have arrested two people besides seizing a gold bar, paintings and jewelry. Moreover, they are still conducting probes against a dozen more people whom they suspect of such tax evasion and money laundering.

The Switzerland-based bank said that it cooperated when local authorities visited its offices in Amsterdam, London and Paris to investigate client tax issues.

The banks' international wealth management unit's head, Iqbal Khan, said that they were surprised by the investigations. However, he shared that the bank had later initiated an internal inquiry. Khan added, "If any individuals are implicated or have violated against these processes or procedures or policies that are in place then we will identify that very quickly."

The investigations, however, infuriated Switzerland's authorities because they were not given prior information about the same. The Dutch prosecutors said that they did not involve Swiss authorities in the investigations as the suspects were related only to Swiss accounts and were not Swiss residents.

Moreover, the FIOD said in a statement, "If the Swiss authorities wish to receive information on the investigation, we, the other countries involved and Eurojust, are always willing to discuss (that) with them."

Eurojust, the agency of the European Union, which deals with judicial co-operation in criminal issues, said that the inspections began in 2016 and any further actions are expected to take place in the next few weeks.

Eurojust said that the Dutch prosecutors had analyzed large volumes of information to search for those suspected of tax evasions and money laundering.

Notably, shares of Credit Suisse closed at $14.84 on Friday, declining 1.6% from the previous day's closing price.

Also, shares of the company gained only 6.1% in the last one year, significantly underperforming the 25% surge for the Zacks categorized Banks - Foreign industry.

In fact, Credit Suisse is among those Swiss banks that faced issues related to tax evasions in the past.

Since 2011, the bank has paid over 2 billion Swiss francs to settle tax fraud cases in the United States, Germany and Italy.

Currently, Credit Suisse carries a Zacks Rank #2 (Buy).

Some other favorably ranked stocks in the same space are Bank of Montreal BMO , Banco de Chile BCH and Banco Bilbao Vizcaya Argentaria, S.A. BBVA .

Bank of Montreal witnessed an upward earnings estimate revision of 4.6% for the current fiscal year, in the last 60 days. Its share price increased 14.3% in the last six months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Banco de Chile carries a Zacks Rank #2. For the current year, its Zacks Consensus Estimate was revised 1.7% upward in the last 60 days. The company's share price increased 6.5% in the last six months.

Banco Bilbao Vizcaya also carries a Zacks Rank #2. The company witnessed an upward earnings estimate revision of 3.4% for the current year, in the last 60 days. Its share price increased 27.9% in the last six months.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Symbols: CS , BMO , BBVA , BCH

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