Butterfield Reaches Resolution, To Pay $5.6M

August 3, 2021

[Updated] The Bank of N.T. Butterfield & Son Limited today announced that it has “reached a resolution with the United States Department of Justice concerning the inquiry into Butterfield’s legacy business with US clients reported in November 2013.”

“The resolution is in the form of a non-prosecution agreement [NPA] with a three-year term. The financial payments totaling $5.6 million in respect of Forfeiture and Tax Restitution Amounts are in line with the existing provision included in Butterfield’s financial statements as recorded in 2015 and 2016,” a spokesperson said.

Michael Collins, Chairman and Chief Executive Officer of Butterfield, said, “We are pleased to resolve this matter which dates back to late 2013. Since that time, we have enhanced our compliance controls for business with US clients and the total payment has been provisioned. Moving forward, we remain focused on delivering for our clients and our stakeholders.”

Update: A statement from the U.S. Department of Justice said, “Audrey Strauss, the United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, and James C. Lee, Chief of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that Bank of N.T. Butterfield & Son Limited (“Butterfield”) entered into a non-prosecution agreement (“NPA”) with the U.S. Attorney’s Office and agreed to pay $5.6 million to the United States for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from 2001 through 2013.

“The NPA was based on Butterfield’s extraordinary cooperation, including its efforts in providing 386 client files for non-compliant U.S. taxpayer-clients, and provides that Butterfield will not be criminally prosecuted.

“The NPA requires Butterfield to forfeit $4.896 million to the United States, representing certain fees that it earned by assisting its U.S. taxpayer-clients in opening and maintaining these undeclared accounts, and to pay $704,000 in restitution to the IRS, representing the approximate unpaid taxes arising from the tax evasion by Butterfield’s U.S. taxpayer-clients.”

Acting Deputy Assistant Attorney General Stuart M. Goldberg said: “As part of the resolution announced today, Butterfield has facilitated the production of approximately 386 unredacted client files. Taxpayers contemplating hiding money offshore and those who would facilitate their fraud should take note – nothing remains hidden forever.”

IRS-CI Chief James C. Lee said: “As a result of the successful resolution of this investigation, Butterfield has agreed to turn over account files relating to U.S. taxpayer-clients who maintained undeclared assets overseas. This agreement marks yet another significant step forward in combating offshore tax evasion. Anyone who is hiding money or assets offshore with the intent of committing tax evasion will be found and prosecuted. It’s not a matter of ‘if,’ it’s a matter of ‘when.’”

The statement added, “The NPA recognizes that, in 2013, Butterfield implemented a series of remedial measures to stop assisting U.S. taxpayers evading federal income taxes. The NPA further recognizes Butterfield’s cooperation, including its efforts to facilitate the production of approximately 386 client files for non-compliant U.S. taxpayers, which included the identities of those U.S. taxpayers.”

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