Banque Pictet, the private banking arm of the Pictet Group based in Switzerland, has admitted to conspiring with U.S. taxpayers to hide billions of dollars from the Internal Revenue Service (IRS) in over 1,600 secret bank accounts. The Justice Department revealed on Monday that Banque Pictet has agreed to pay over $120 million in restitution to the U.S. Treasury as part of a settlement.

The bank’s involvement in the tax evasion scheme spanned from 2008 through 2014, during which it conspired with American taxpayer clients to conceal more than $5.6 billion of the approximately $20 billion in U.S. assets. This led to an evasion of around $50.6 million in U.S. taxes, according to prosecutors.

Of the $5.6 billion concealed, the funds were distributed across 1,637 accounts, implicating more than 40% of the total 3,736 private accounts owned by U.S. taxpayers held by the bank. Banque Pictet reportedly assisted its American clients in hiding their undeclared accounts through various means, including the formation and administration of offshore entities. Undeclared accounts were then maintained in the names of these entities on behalf of U.S. taxpayer clients.

Jim Lee, Chief of IRS Criminal Investigation, emphasized the importance of the case in sending a strong message to those attempting to hide assets and income offshore. Lee stated, “This case should provide a clear message to others who try to hide their assets and income offshore. Offshore tax evasion is a priority for IRS Criminal Investigation.”

The settlement underscores the ongoing efforts by U.S. authorities to combat tax evasion and sends a clear warning to financial institutions and individuals involved in such illicit activities. As regulatory scrutiny intensifies globally, financial institutions face increasing pressure to ensure compliance with international tax laws and prevent their involvement in tax evasion schemes.