Guilty: Credit Suisse hit with money laundering conviction

The decision is the primary ever felony conviction of a serious Swiss lender within the nation’s historical past.

The judgment is one other blow to the tarnished status of Credit score Suisse, which had argued the crimes date to an period when compliance requirements had been much less stringent [File: Pascal Mora/Bloomberg]

Cocaine. Stashes of money. A down-on-his-luck Bulgarian wrestler. For days throughout the February trial, the lurid particulars captivated Swiss finance as Credit score Suisse Group AG confronted fees that it had failed to forestall a drug trafficker from laundering hundreds of thousands.

On Monday, the decision was in: responsible — a historic judgment for the financial institution within the first ever felony conviction of a serious Swiss lender within the nation’s historical past. The ruling, during which a former relationship supervisor on the financial institution was additionally convicted on cash laundering fees, was handed down by Switzerland’s prime felony court docket on Monday afternoon.

The lady was given a 20-month suspended jail sentence whereas Credit score Suisse faces a wonderful of two million Swiss francs ($2.1 million) and was additionally hit with a declare of 19 million francs, equal to the quantity the financial institution allowed to be laundered.

The judgment is one other blow to the tarnished status of Credit score Suisse, which had argued the crimes date to an period when compliance requirements had been much less stringent. It has been scuffling with a sequence of scandals which have despatched its shares to near-record lows, and should face a second felony indictment in an unrelated case later this yr.

The financial institution stated in an announcement it can attraction the choice, noting that the pretrial investigation dates again greater than 14 years.

“Credit score Suisse is repeatedly testing its anti-money laundering framework and has been strengthening it over time, in accordance with evolving regulatory requirements,” the financial institution stated.

The case was criticized by Credit score Suisse for having been introduced so a few years after the occasions in query. The financial institution expressed its “astonishment” in late 2020 when Swiss prosecutors publicly charged it with cash laundering offenses, given the alleged crimes passed off between 2004 and 2008.

However beneath Swiss regulation, native prosecutors can press felony fees in opposition to banks in the event that they consider these establishments didn’t do sufficient to display screen shoppers and their money for apparent ties to illicit exercise. The previous Credit score Suisse supervisor, who can solely be named as E. beneath Swiss reporting restrictions, accepted deposits of used financial institution notes that frequently exceeded 500,000 euros ($528,650) at a time, in keeping with the 515-page indictment. Money deposits had been quite common given the parlous state of Bulgaria’s banks on the time, she stated in testimony.

Two different Bulgarians had been convicted within the case for participation in a felony group and aggravated cash laundering. One was given a 36-month jail sentence, with 18-months of it suspended, and the opposite was handed a 12-month suspended sentence.

A lawyer for E. stated they'd attraction Monday’s resolution.

“This judgment locations the accountability for cash laundering on individuals with none severe coaching or expertise,” Grégoire Mangeat, E.’s lawyer, stated. “It subsequently raises quite a lot of authorized points, which is why our consumer has determined to combat and to defend her place with the utmost vigor.”

Drug Mules

The primary Bulgarian on the coronary heart of the scandal, who was later sentenced to a 20-year time period for his drug offenses, organized the import of tens of metric tons of cocaine into Europe between 2002 and 2012, utilizing boats, planes and drug mules keen to swallow cocaine-packed rubber balls.

On the second day of the February trial, Credit score Suisse gained an early victory when the presiding choose stated any proof earlier than February 2007 could be excluded from consideration, given the 15-year restrict on aggravated-money laundering fees. However the court docket then proceeded to listen to particulars that highlighted the financial institution’s compliance shortcomings.

E. testified that she had “no banking” background and solely handed her preliminary banking examination to enter the trade on the third attempt. Later, she stated that Credit score Suisse didn’t freeze or block the Bulgarian’s accounts following his arrest on drug trafficking fees as she acquired directions to “wait and see if this data might be confirmed.”

(Updates with consumer supervisor’s lawyer from the tenth paragraph)