Credit Suisse to plead guilty in tax evasion case

NEW YORK, May 19 (UPI) -- Credit Suisse is set to become the first bank to plead guilty to tax evasion, suggesting that the big banks aren't immune from facing criminal charges.

The bank is expected to plead guilty in court Monday to charges that it helped Americans evade taxes and will pay around $2.5 billion to the Justice Department and other regulators. As a part of the deal, the Justice Department said the Swiss bank had agreed to plead guilty to the one count of conspiring to aid tax evasion.

CEO Brady Dougan and Chairman Urs Rohner will remain in their roles following the settlement, contrary to rumors that they would step down.

Credit Suisse faces the biggest risk from its own clients, especially pension funds, some of which have internal requirements that do not allow it to deal with companies that pleaded guilty to a crime. An exodus of customers could hurt the banks's credit rating and increase its borrowing costs.

The case would deal a hefty blow to overseas tax evasion which has become the hallmark of the Swiss financial system much to the scorn of U.S. lawmakers. This is also the first time since Drexel Burnham Lambert pleaded guilty in 1989 that a large bank has entered a guilty plea in the United States.

Credit Suisse is not the last to face action. BNP Paribas, France's largest bank, is next in line to plead guilty to charges in the coming weeks and American banks could be taken to task, such as JPMorgan Chase and Citigroup, which are already subject to criminal investigations.