In the nation’s first criminal trial of one of its major banks, Credit Suisse was found guilty by Switzerland’s Federal Criminal Court of failing to prevent money laundering.
The trial, which featured testimony on killings and money stuffed into suitcases and is considered a test case for prosecutors taking a stronger stance against the country’s banks, resulting in the conviction of a former employee for money laundering.
It adds to the second-largest bank in Switzerland’s growing list of problems, which already include billions in losses from risk management and compliance errors.
The former employee and Credit Suisse both denied misconduct.
Credit Suisse declared that it would contest the judgment.
The judges evaluated Credit Suisse’s and the former worker’s efforts from 2004 to 2008 to stop a suspected Bulgarian cocaine trafficking organization from laundering money through the bank.
On Monday, the court announced that it had discovered failings at Credit Suisse in both the supervision of the application of anti-money laundering regulations and the management of client contacts with the criminal organization.
The former bank employee was found guilty of qualified money laundering because “these shortcomings permitted the withdrawal of the criminal organization’s assets,” the court stated.
In announcing the decision, the presiding judge stated, “The Corporation might have prevented the infringement if it had performed its organizational requirements.”
According to Credit Suisse, the case resulted after a more than 14-year-old inquiry.
According to changing regulatory criteria, Credit Suisse has been enhancing its anti-money laundering infrastructure over time, according to the bank.
For Credit Suisse, it’s crucial to produce compliant company growth that complies with legal and regulatory regulations.
A $2 million Swiss francs fine will be imposed on Credit Suisse. The court also ordered the bank to forfeit more than 19 million francs, which is the amount that could not be confiscated because of internal problems at Credit Suisse, in addition to ordering the confiscation of assets worth more than 12 million francs that the drug gang held in accounts at Credit Suisse.
The former employee, who cannot be identified due to Swiss privacy regulations, was given a suspended 20-month prison sentence for money laundering as well as a fine by the court.
COURT ACTION
A strong message might be sent in a nation known for its banking industry by Switzerland’s legal action against Credit Suisse, according to experts on corruption and money laundering.
On the eve of the trial, Mark Pieth, a money-laundering specialist at the University of Basel, remarked, “This has the potential to be a watershed event for Switzerland.”
The fact that Switzerland is suing a firm, and not just any company, but Credit Suisse, one of the crown jewels of Switzerland, is what makes this case noteworthy.
Following an international regulatory push to stop money laundering, Swiss private banks have implemented stricter anti-money laundering controls.
A firm may be subject to criminal liability under Swiss law if it lacks proper organization or fails to take all necessary precautions to prevent a crime from occurring.
In the Credit Suisse case, the prosecution said that the former relationship manager participated in transactions totaling more than 146 million Swiss francs, including 43 million francs in cash, some of it put into suitcases that helped clients conceal the money’s unlawful origins.
On Monday, the relationship manager—who departed Credit Suisse in 2010—was not present in court.
The former relationship manager testified in court in February that Credit Suisse knew about alleged killings and cocaine smuggling tied to a Bulgarian gang but continued to manage cash that is now the subject of the trial.
The former banker testified throughout the hearings that she told her bosses about incidents involving the clients, including two deaths, but they still chose to pursue the business.
Credit Suisse disputes the money’s alleged illicit origin, claiming that the former Bulgarian wrestler and those close to him ran legal enterprises in hotels, leasing, and construction.
