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, on 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 case against one of its major banks.

The trial – which included testimony on murders and cash placed in suitcases – is being seen as a test case for prosecutors who may crack down on the country’s banks.

The judges examined whether Credit Suisse and the former employee did enough to prevent an alleged Bulgarian cocaine trafficking gang from laundering profits through the bank from 2004 to 2008.

Both Credit Suisse and the former employee had denied wrongdoing.

The court said Monday it found shortcomings within Credit Suisse both in terms of managing client relationships with the criminal organization and in terms of overseeing the implementation of anti-money laundering regulations.

“These shortcomings allowed the criminal organization’s assets to be deducted, which was the basis for convicting the former bank employee of qualified money laundering,” the court said.

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

The court awarded the former employee, who cannot be named under Swiss data protection laws, a conditional prison sentence of 20 months and a fine for money laundering.

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

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

legal action

Corruption and money laundering experts had said that the fact that Switzerland had taken legal action against a global banking giant like Credit Suisse could send a strong signal in a country famous for its banking industry.

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

“What is significant about this case is that Switzerland is suing a company and not just any company – Credit Suisse is one of the jewels in the Swiss crown.”

Swiss private banks have introduced stricter money laundering controls to prevent money laundering following an international crackdown by regulators.

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

Under Swiss law, a company can be held liable for inadequate organization or failure to take all reasonable measures to prevent a crime, which could result in criminal prosecution.

In the Credit Suisse case, prosecutors claimed the former relationship manager helped disguise the criminal origin of funds for clients through transactions totaling more than CHF146 million, including CHF43 million in cash, some stuffed in suitcases.

The client advisor 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 learned of killings and cocaine smuggling allegedly linked to a Bulgarian gang but continued to manage cash, which is now the focus of the trial.

The former banker said she briefed her managers on events during the hearings, including two murders related to the clients, but they decided to go ahead with the business anyway.

Credit Suisse has denied the illegal origin of the money, saying that former Bulgarian wrestler Banev and his circle run legitimate businesses in construction, rentals and hotels. Credit Suisse found guilty in money laundering case

Joshua Buckhalter

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