On Monday, Credit Suisse will face accusations in a Swiss court for allegedly allowing a Bulgarian cocaine trafficking ring to launder millions of euros, some of which were hidden in luggage.
Prosecutors believe that between 2004 and 2008, the country’s second-largest bank and one of its former relationship managers failed to take all required procedures to prevent alleged drug traffickers from hiding and laundering funds.
“All allegations in this legacy matter presented against Credit Suisse are without substance,” the bank said in a statement to reporters. “Credit Suisse is sure that its former employee is innocent.”
Prosecutors are seeking roughly 42.4 million Swiss francs in compensation from Credit Suisse in the first criminal trial of a large bank in Switzerland. Credit Suisse said it will “fight itself strongly in court.”
The case has sparked widespread interest in Switzerland, where it is considered as a litmus test for prosecutors’ prospective stronger approach against the country’s banks.
The indictment is about 500 pages long and focuses on Credit Suisse and an ex-links employee’s with former Bulgarian wrestler Evelin Banev and various friends, two of whom are indicted in the case. A second indictment in the case accuses a former Julius Baer relationship manager of aiding money laundering.
The case was unjustified, according to a legal adviser for the ex-Credit Suisse employee, who cannot be identified due to Swiss privacy restrictions. His client denied wrongdoing.
A lawyer representing the two alleged gang members, who are charged in Swiss federal court with various counts of misappropriation, fraud, and forgery of papers but cannot be named due to Swiss privacy regulations, declined to comment. Requests for a response from a lawyer for the former Julius Baer relationship manager were not returned.
Banev, who is not facing charges in Switzerland, was found guilty of drug trafficking in Italy in 2017 and subsequently in Bulgaria in 2018 for being a member of a criminal organization that trafficked tons of cocaine from Latin America.
He escaped but was apprehended in Ukraine in September, where Bulgarian prosecutors are seeking his extradition on charges of organizing a criminal gang and drug trafficking, according to Interpol’s red list of sought persons.
No one from Banev’s legal team could be reached for comment. Banev’s Bulgarian lawyer announced that she would no longer be representing him.
Julius Baer that is not involved in the lawsuit, declined to comment.
IN THE CASE OF CASH
Prosecutors contend in the indictment that when the former Credit Suisse employee joined the firm in 2004, she brought with her at least one Bulgarian customer who was a Banev associate.
According to the accusation, the customer, who was shot dead as he exited a restaurant with his wife in Sofia, Bulgaria in 2005, had begun depositing suitcases full of cash in a Credit Suisse safe deposit box.
Prosecutors claim the gang used smurfing to launder money, putting millions of euros in small-value bills into safety deposit boxes and later transferring them into accounts. Smurfing is when a large sum of money is broken down into smaller amounts that are below the anti-money laundering alert threshold.
The defendants claimed that this was common practice at the time the deposits were made, despite the fact that Swiss private banks have subsequently introduced significantly tighter anti-money laundering so-called know-your-client checks in response to international criticism.
Prosecutors claim that the former relationship manager, who left Credit Suisse in 2010 after being detained by police for two weeks in 2009, assisted the clients in concealing the criminal origins of money by conducting over 146 million Swiss francs in transactions, including 43 million francs in cash.
“Our client is being wrongly accused,” solicitors for the ex-employee, MANGEAT LLC, told reporters. “Swiss law requires that a person be involved in order to condemn a bank.” “She is adamantly innocent, and the accusations have infuriated her. We will argue for her complete and total acquittal.”
Credit Suisse, according to a source acquainted with the bank’s thinking, disputed the money’s unlawful origins, claiming that Banev and his associates ran legitimate construction, leasing, and hotel enterprises.
The Swiss bank intends to draw attention to calls made by its compliance department to Swiss authorities after Banev was temporarily jailed in Bulgaria in April 2007, according to the indictment.
Credit Suisse is hoping that the court will see its compliance department’s actions as evidence that the bank is serious about its anti-money laundering commitments and is working with prosecutors.
In response to a request from Bulgaria, the prosecutors contacted Credit Suisse for information on accounts owned by Banev and his accomplices in June 2007, according to the source.
The bank’s compliance department noticed a series of withdrawals and asked prosecutors to freeze the accounts, but they were told not to do so because it would alert the clients, according to the source.
Much of the money had been removed by the time prosecutors gave Credit Suisse the green light.
On Friday, the prosecutors’ office declined to comment, stating that the case had been turned over to the court.
Federal prosecutors filed a second accusation against the former Julius Baer relationship manager, which is being tried in the same court case, alleging that part of the monies was transferred to another Swiss bank.
The former relationship manager, who resigned a few months after the transfers, faces charges of money laundering facilitation.
According to the accusation, the bank declined to take a suitcase full of cash from the suspects.
