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Cayman National units admit helping U.S. clients evade taxes

NEW YORK (Reuters) – Two units of Cayman National Corporation Ltd pleaded guilty to U.S. charges on Wednesday as part of a $6 million settlement of an investigation into how the financial services firm helped Americans evade paying taxes.

Cayman National Securities Ltd and Cayman National Trust Co Ltd each pleaded guilty in federal court in Manhattan to conspiring with U.S. taxpayer clients to hide $130 million in offshore accounts and evade paying taxes from 2001 to 2011.

In court, Cayman National CEO Stuart Dack said the subsidiaries “engaged in this conduct knowingly and willingly and were aware this conduct was wrong.”

The case was the latest in a series brought by the U.S. Department of Justice in a crackdown on offshore tax evasion by wealthy Americans using undeclared accounts.

Manhattan U.S. Attorney Preet Bharara said the pleas by the Cayman National units marked the first convictions of financial institutions outside Switzerland for helping U.S. citizens evade taxes.

As part of the plea agreement, Cayman National will be required to provide prosecutors with client files. Bharara said prosecutors were committed to making sure that people who evaded paying taxes were held accountable.

“We will follow them no matter how far they go to hide their accounts, whether it is Switzerland, the Cayman Islands, or some other tax haven,” he said in a statement.

Cayman National, which provides banking, trust and brokerage services, previously disclosed the settlement with the Justice Department, saying it cooperated in the probe.