https://www.cnbc.com/2022/06/27/credit-suisse-found-guilty-in-money-laundering-case.html

Credit Suisse and a former employee have been found guilty by Switzerland’s Federal Criminal Court of failing to prevent money-laundering in the country’s first criminal trial of one of its major banks.

The trial — which included testimony on murders and cash stuffed into suitcases — is seen as a test case for prosecutors taking a potentially tougher line against the country’s banks.

The judges looked at whether Credit Suisse and the former employee did enough to prevent an alleged Bulgarian cocaine trafficking gang from laundering profits through the bank from 2004 to 2008.

Both Credit Suisse and the former employee had denied wrongdoing.

The court said on Monday it found deficiencies within Credit Suisse both with regard to the management of client relations with the criminal organization and with regard to the monitoring of the implementation anti-money laundering rules.

“These deficiencies enabled the withdrawal of the criminal organization’s assets, which was the basis for the conviction of the bank’s former employee for qualified money laundering,” the court said.

Credit Suisse faces a fine of 2 million Swiss francs ($2.1 million).

The court handed the former employee, who cannot be named under Swiss privacy laws, a suspended 20-month prison sentence and a fine for money laundering.

Credit Suisse said it would appeal against the conviction, which it said arose from a investigation that dated back more than 14 years.

“Credit Suisse is continuously testing its anti-money laundering framework and has been strengthening it over time, in accordance with evolving regulatory standards,” the bank said. “Generating compliant business growth in line with legal and regulatory requirements is key for Credit Suisse.”

Legal action

Corruption and money laundering experts had said the fact that Switzerland had taken legal action against a global banking player like Credit Suisse could send a powerful message in a country famous for its banking industry.

“This has the potential to be a watershed moment for Switzerland,” Mark Pieth, a money laundering expert at the University of Basel, said on the eve of the trial.

“What is significant about this case is that Switzerland is taking legal action against a company and not just any company — Credit Suisse is one of the jewels in the Swiss crown.”

Swiss private banks have adopted tougher anti-money laundering checks after an international regulatory crackdown to prevent money laundering.

Nonetheless, Switzerland still has massive gaps in the prevention of money laundering, Marc Herkenrath, deputy director of Transparency International in Switzerland, had said.

Under Swiss laws, a company can be held liable for inadequate organization or failing to take all reasonable measures to prevent a crime from happening, exposing it to criminal liability.

In the Credit Suisse case, prosecutors alleged the former relationship manager helped to conceal the criminal origins of money for clients through more than 146 million Swiss francs in transactions, including 43 million francs in cash, some of it stuffed into suitcases.

The relationship manager, who left Credit Suisse in 2010, was not in the courtroom on Monday.

During court hearings in February, the former relationship manager said Credit Suisse learned of murders and cocaine smuggling allegedly connected to a Bulgarian gang but continued to manage cash that is now the focus of the trial.

The former banker said during the hearings she informed her managers about events, including two murders, associated with the clients, but that they decided to pursue the business nonetheless.

Credit Suisse has disputed the illegal origin of the money, saying that former Bulgarian wrestler Banev and his circle operated legitimate businesses in construction, leasing and hotels.