- Credit Suisse is the first large Swiss bank to face criminal proceedings
- The former banker was found guilty of qualified money laundering
- The bank plans to appeal
BELINZONA, Switzerland, June 27 (Reuters) – Credit Suisse (CSGN.S) was convicted by the Swiss Federal Criminal Court on Monday of preventing money laundering by a Bulgarian cocaine gang in the country’s first criminal trial against one of its large banks. Read more
A former employee was found guilty of money laundering in a trial that included testimony about murders and money packed in suitcases and is being considered as a test case for prosecutors who take a tougher line against banks in the country.
The decision marks another headache for Switzerland’s second-largest bank, which is rocked by billions in losses from mistakes in risk management and compliance.
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Federal Prosecutor Alice de Chambriere hailed the sentence as “good for transparency”.
Both Credit Suisse and the former employee denied wrongdoing.
Credit Suisse said it would appeal the sentence. Read more
Judges examined whether Credit Suisse and the former employee had done enough to prevent the cocaine gang from laundering profits through the bank from 2004 to 2008. read more
The court said on Monday that it had found shortcomings in 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 omissions made it possible to withdraw the assets of the criminal organization, which was the basis for the conviction of the former employee of the bank for qualified money laundering,” the court said.
“The company could have prevented the breach if it had fulfilled its organizational obligations,” the chairman said in passing sentence, adding that the former employee’s superiors were “passive.”
Credit Suisse said the case arose from an investigation that lasted more than 14 years.
“Credit Suisse is constantly testing its anti-money laundering framework and strengthening it over time, in line with evolving regulatory standards,” the bank said.
“Generating compatible business growth in line with legal and regulatory requirements is key for Credit Suisse.”
Credit Suisse was fined 2 million Swiss francs ($ 2.1 million). The court also ordered the confiscation of assets worth more than 12 million francs held by the drug group in Credit Suisse accounts and ordered the bank to waive more than 19 million francs, an amount that cannot be confiscated due to internal deficiencies. Credit Suisse.
The court sentenced the former employee, whose name could not be named under Swiss confidentiality laws, to a suspended sentence of 20 months in prison and a fine for money laundering.
The logo of the Swiss bank Credit Suisse can be seen at its headquarters on Paradeplatz in Zurich, Switzerland, October 1, 2019. REUTERS / Arnd Wiegmann
The chairman said she had not fulfilled her role in the bank’s “first line of defense”.
The former banker’s lawyer said he would appeal the “unjustified and unfair decision”, noting that she had not made a financial profit.
“This sentence places the responsibility for money laundering on people without serious training or experience,” her lawyer said.
Shares of Credit Suisse rose 0.4%, while the European Banking Index (.SX7P) rose 0.3%. They have decreased by more than 40% in the last year.
LEGAL EFFECT
Corruption and money laundering experts say the fact that Switzerland has taken legal action against a global banking player such as Credit Suisse could send a powerful message to a country known for its banking industry.
“This has the potential to be a turning point for Switzerland,” said Mark Pete, a money laundering expert at the University of Basel, ahead of the trial.
“What is important in this case is that Switzerland is taking legal action against a company, not against any company – Credit Suisse is one of the jewels in the Swiss crown.”
Swiss private banks have adopted stricter anti-money laundering checks following international regulatory repression to prevent money laundering.
Under Swiss law, a company may be held liable for inadequate organization or failure to take all reasonable measures to prevent crime.
In the case of Credit Suisse, prosecutors allege that the former liaison manager helped cover up the criminal origin of money for customers through transactions worth more than 146 million Swiss francs, including 43 million francs in cash, some of which were packed in suitcases. Read more
The liaison manager, who left Credit Suisse in 2010, was not in court on Monday.
During court hearings in February, the former liaison manager said Credit Suisse had learned of cocaine killings and smuggling allegedly linked to the Bulgarian gang, but continued to manage cash in the center. of the process.
The former banker said during the hearings that she informed her managers about events, including two murders related to clients, but they still decided to do business.
Credit Suisse disputed the illegal origin of the money, saying a former Bulgarian wrestler and his circle ran a legitimate business in construction, leasing and hotels.
(1 dollar = 0.9594 Swiss francs)
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Reports by Paul Carell, Additional Reports by Brena Hughes Negaiwi and John O’Donnell; Edited by Michael Shields and Jane Merriman
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