Credit Suisse found guilty in money laundering case

A Credit Suisse logo in the window of a Credit Suisse Group AG bank branch in Zurich, Switzerland, Thursday, April 8, 2021.

Stefan Wermuth | Bloomberg | Getty Images

Credit Suisse and a former employee have been found guilty by the Swiss Federal Criminal Court of failing to prevent money laundering in the country’s first criminal trial against one of its major banks.

The trial – which included testimony about murders and money stuffed into suitcases – is seen as a test for prosecutors taking a potentially tougher line against the nation’s banks.

Judges are examining whether Credit Suisse and the former employee did enough to stop a suspected Bulgarian cocaine-smuggling gang from laundering profits through the bank from 2004 to 2008.

Credit Suisse and the former employee had denied any wrongdoing.

The court said on Monday that it had found shortcomings within Credit Suisse both in terms of managing customer relations with the criminal organization and in terms of monitoring the application of anti-money laundering rules.

“These breaches allowed the withdrawal of the assets of the criminal organization, which was the basis of the conviction of the former bank employee for aggravated money laundering,” the court said.

Credit Suisse faces a fine of 2 million Swiss francs ($2.1 million).

The court sentenced the former employee, who cannot be named under Swiss privacy laws, to a 20-month suspended prison sentence and a fine for money laundering.

Credit Suisse said it would appeal the conviction, which it said stemmed from an investigation dating back more than 14 years.

“Credit Suisse continuously tests its anti-money laundering framework and strengthens it over time in line with evolving regulatory standards,” the bank said. “Generating business growth in line with legal and regulatory requirements is essential for Credit Suisse.”

A legal action

Corruption and money laundering experts say the fact that Switzerland has taken legal action against a global banking player like Credit Suisse could send a powerful message in a country famous for its banking sector.

“This could be a watershed moment for Switzerland,” said Mark Pieth, a money laundering expert at the University of Basel, on the eve of the trial.

“What is significant in this case is that Switzerland is taking legal action against a company and not just any company. Credit Suisse is one of the jewels in the Swiss crown.”

Swiss private banks have adopted tougher anti-money laundering controls after an international regulatory crackdown to prevent money laundering.

Nevertheless, Switzerland still has huge gaps in preventing money laundering, said Marc Herkenrath, deputy director of Transparency International in Switzerland.

Under Swiss law, a company can be held liable for inadequate organization or for failing to take all reasonable measures to prevent a crime from occurring, exposing it to criminal liability.

In the Credit Suisse case, prosecutors alleged that the former relationship manager helped conceal the criminal origins of clients’ money through more than CHF146 million in transactions, including CHF43 million in cash, some of which stuffed into suitcases.

The relationship manager, who left Credit Suisse in 2010, was not in the courtroom on Monday.

During court hearings in February, the former relationship manager said Credit Suisse had knowledge of murders and cocaine trafficking believed to be linked to a Bulgarian gang, but continued to handle the money that makes now the subject of the trial.

The former banker told the hearings that she informed her officials of the events, including two murders, associated with the clients, but they nevertheless decided to prosecute the company.

Credit Suisse disputed the illegal origin of the money, saying former Bulgarian wrestler Banev and his entourage operated legitimate businesses in construction, rentals and hotels.

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