NEW YORK: The Bank of N.T. Butterfield & Son, based in Bermuda, has agreed to pay US$5.6mil (RM23.7mil) to resolve a criminal probe by US authorities after admitting it helped hundreds of American clients evade taxes for more than a decade.

       Butterfield helped clients hide assets from the Internal Revenue Service (IRS), letting them use sham entities to funnel money between US and Cayman Islands accounts, Manhattan US Attorney Audrey Strauss said in a statement.

       “Butterfield knew or should have known that such US taxpayer clients were using their Butterfield accounts to evade their US tax obligations,” according to the non-prosecution agreement signed by the Hamilton, Bermuda-base bank. Butterfield can avoid criminal prosecution by cooperating with investigators for three years and not violating other terms of the agreement.

       Between 2001 and 2013, the bank had as many as 300 US accounts hidden from the IRS at any time, and it helped hide US$61mil (RM258mil) in assets, according to the statement.

       Prosecutors cited the “extraordinary cooperation” by Butterfield, which will forfeit US$4.9mil (RM20.7mil) and pay US$704,000 (RM2.98mil) in restitution.

       It also gave unredacted files on 386 non-compliant clients to government investigators.

       Butterfield began remedial measures in 2013, according to the non-prosecution agreement. — Bloomberg