January 27, 2016 / 11:03 PM / 4 years ago

UPDATE 1-U.S. settles last Swiss bank case in $1.3 bln program

(Recasts to add context about Swiss bank program)

By Suzanne Barlyn

Jan 27 (Reuters) - The U.S. Justice Department announced the final settlement on Wednesday in a program, valued at more than $1.3 billion, that has allowed Swiss banks to avoid possible prosecution for helping wealthy Americans evade taxes.

Swiss bank HSZH Verwaltungs AG will pay more than $49.8 million to avoid charges that it aided U.S. tax cheats, the Justice Department said.

The department has executed similar agreements with a total of 80 Swiss banks since March 30, 2015 when Lugano-based private bank BSI SA avoided prosecution for suspected tax-related offenses by paying a $211 million penalty.

The program, announced in 2013, has allowed many Swiss banks to resolve potential criminal charges by disclosing cross-border activities that helped U.S. account holders conceal assets.

Under the program, banks were required to provide detailed information on the accounts of U.S. taxpayers under investigation. Swiss banks, which have come under intense pressure to roll back their traditional secrecy, were also required to cooperate in treaty requests for account information.

But banks that were already under criminal investigation were not eligible for the program.

In 2014, Swiss banking giant Credit Suisse pleaded guilty to tax evasion and agreed to a $2.6 billion settlement with the Justice Department. It was the largest bank in decades to plead guilty to a criminal charge after facing accusations that it helped American clients conceal assets in secret accounts that were not disclosed to U.S. tax authorities.

The penalty was much more severe than the $780 million that rival UBS AG agreed to pay in 2009 as part of a deferred prosecution deal. Prosecutors, in deferred prosecution agreements, agree to dismiss charges once a defendant meets certain requirements.

Banks that have been eligible for the Justice Department’s voluntary Swiss program, however, enter non-prosecution agreements, in which prosecutors have not filed charges.

HSZH, whose history dates back to 1889, was wound down in 2014 after being sold to various buyers, according to its agreement with the Justice Department. A representative could not immediately be reached for comment. The bank was, at one time, a part of UBS. (Reporting by Suzanne Barlyn; Editing by Lisa Von Ahn and Tom Brown)

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