Guilty: Credit Suisse hit with money laundering conviction | Banking News

The verdict is the first-ever criminal conviction of a major Swiss lender in the country’s history.

Cocaine. Money caches. An unlucky Bulgarian wrestler. For days during the February trial, the grim details gripped Swiss finance as Credit Suisse Group AG was accused of failing to stop a drug trafficker from laundering millions.

On Monday, the verdict was: guilty – a historic judgment for the bank in the first-ever criminal conviction of a major Swiss lender in the country’s history. The ruling, in which a former account manager at the bank was also convicted of money laundering, was handed down by Switzerland’s highest criminal court on Monday afternoon.

The woman was given a 20-month suspended prison sentence while Credit Suisse faces a fine of 2 million Swiss francs ($2.1 million) and was also hit with a claim of 19 million francs, or the equivalent of the amount that the bank has authorized to launder.

The ruling is another blow to the tarnished reputation of Credit Suisse, which had argued the crimes dated from a time when compliance standards were lower. He has been battling a series of scandals that have taken his shares to near-record highs and could face a second criminal charge in an unrelated case later this year.

The bank said in a statement it would appeal the decision, noting that the preliminary investigation dates back more than 14 years.

“Credit Suisse continuously tests its anti-money laundering framework and strengthens it over time in line with evolving regulatory standards,” the bank said.

The case has been criticized by Credit Suisse for being brought so many years after the events in question. The bank expressed “amazement” in late 2020 when Swiss prosecutors publicly charged it with money laundering offences, given that the alleged crimes took place between 2004 and 2008.

But under Swiss law, local prosecutors can bring criminal charges against banks if they believe these institutions have not done enough to screen customers and their money for obvious links to illicit activity. The former Credit Suisse director, who can only be named E. under Swiss reporting restrictions, accepted deposits of used banknotes that routinely exceeded 500,000 euros ($528,650) at a time, according to the 515-page indictment. Cash deposits were very common given the precarious state of Bulgarian banks at the time, she said in her testimony.

Two other Bulgarians were convicted in this case for participation in a criminal organization and aggravated money laundering. One was sentenced to 36 months in prison, of which 18 months was suspended, and the other was sentenced to 12 months in prison, suspended.

A lawyer for E. said they would appeal Monday’s decision.

“This judgment places the responsibility for money laundering on people without serious training or experience,” said Grégoire Mangeat, E. “So this raises a number of legal issues, which is why our client has decided to fight and defend her position with the utmost vigor.”

Drug mules

The main Bulgarian at the heart of the scandal, who was later sentenced to 20 years in prison for his drug-related offenses, organized the import of tens of tons of cocaine into Europe between 2002 and 2012, using boats , airplanes and consenting drug mules. swallowing rubber balls stuffed with cocaine.

On the second day of the February trial, Credit Suisse won a quick victory when the presiding judge ruled that any evidence before February 2007 would be excluded from consideration given the 15-year limit on money laundering charges. worsen. But the court then heard details highlighting the bank’s compliance shortcomings.

E. testified that she had “no banking experience” and only passed her initial banking exam to enter the industry on her third attempt. She later said that Credit Suisse did not freeze or block the Bulgarian’s accounts after he was arrested for drug trafficking, as she had received instructions to “wait and see if this information will be confirmed”.

(Updates with Client Manager Counsel from 10th paragraph)