Credit Suisse found guilty in cocaine cash laundering case

BELLINZONA, Switzerland –

Credit Suisse was convicted on Monday by the Federal Criminal Court in Switzerland for failing to prevent money-laundering from a Bulgarian cocaine trafficking group. This was the first criminal case against one of the country’s major banks. 

The trial, which featured testimony on murders and cash hidden in suitcases, found a former employee guilty of money laundering. This case is seen as a test case that will allow prosecutors to take a more aggressive line against the country’s banks.

The ruling will be another headache for Switzerland’s second largest bank. This bank has been suffering from billions in losses caused by compliance and risk-management errors.

Alice de Chambrier, federal prosecutor, praised the verdict as “good to transparency.”

Both Credit Suisse and the former employee deny wrongdoing.

Credit Suisse saidIt would appeal against conviction. 

Judges considered whether Credit Suisse and the former employee did enough in order to stop the cocaine trafficking gang’s laundering of profits through the bank between 2004 and 2008. 

The court saidMonday’s report found weaknesses in Credit Suisse’s management. clientBeziehungen with the criminal organisation and the monitoring of the application anti-money laundering regulations.

The court stated, “These deficiencies enabled us to withdraw the assets of the criminal organisation, which was the basis for our conviction of the bank’s former employee of qualified money laundering.” said.

“The company could have prevented infringement if they had fulfilled their organizational obligations,” said the presiding Judge. saidThe verdict was handed down, and the ex-employee’s superiors were “passive.”

Credit Suisse saidThe case was a result of a 14-year-old investigation.

Credit Suisse is constantly testing its anti-money laundering framework, and has been strengthening that framework over time, in line with evolving regulatory standards,” said the bank. said.

Credit Suisse’s key objective is to generate compliant business growth that conforms with regulatory and legal requirements.

Credit Suisse was penalized 2 million Swiss Francs (US$2.1 Million). The court also ordered Credit Suisse to forfeit assets valued at more than 12,000,000 francs. Credit Suisse was fined 2,000,000 Swiss Francs (US$2.1 Million).

The court sentenced the former employee, who cannot under Swiss privacy laws be identified, to a suspended 20 month prison sentence and a $500 fine for money laundering.

The presiding judge saidShe had failed in her role as the bank’s “first defense”

The former attorney for a banker saidShe will appeal against the “unfounded” and unfair decision, noting that she did not make any financial gain.

“This judgment places responsibility for money laundering on those without any serious training or experience,” her lawyer said. said.

Credit Suisse shares closed higher by 0.4%, while European banking sector index.SX7P rose 0.3%. They have fallen 40% in the last year.

LEGAL ACTION

Experts in corruption and money laundering saidThe fact that Credit Suisse was sued by Switzerland could be a powerful message for a country known for its banking industry.

“This has the potential for to be a watershed occasion for Switzerland,” Mark Pieth (a money laundering expert at University of Basel), said. saidOn the eve before the trial.

“What is important about this case? Switzerland is taking legal action against an company, and not just any company. Credit Suisse is one jewel in the Swiss crown.

After an international regulatory crackdown on money laundering, Swiss private banks have increased their anti-money laundering controls.

A company can be held responsible under Swiss law if it fails to organize properly or fails to take all reasonable steps to prevent a crime happening.

Prosecutors in the Credit Suisse case alleged that the former relationship manager helped conceal the criminal origins money for clients through more then 146 million Swiss Francs in transactions, which included 43 million francs cash and some of it stuffed in suitcases.

The relationship manager, who had left Credit Suisse in 2010 was not present in courtroom.

During February court hearings, the former relationship manger was identified. saidCredit Suisse was informed of murders and cocaine trafficking allegedly connected with the Bulgarian gang. However, Credit Suisse continued to manage cash that became a focus of the trial.

The former banker saidDuring the hearings, she told her managers about events, including two homicides, but they decided to continue the business.

Credit Suisse has denied the illegal origin of the money. It said that a former Bulgarian wrestler along with his circle ran legitimate businesses in the construction, leasing, and hotel industries.

(Reporting by Paul Carrel; Additional reporting by Brenna Hughes Neghaiwi, John O’Donnell; Editing and editing by Michael Shields & Jane Merriman