Jakarta, CNBC Indonesia – Investment banking firm Credit Suisse Group AG was convicted by the Swiss Federal Criminal Court for failing to prevent money laundering by a Bulgarian cocaine smuggling gang Monday (27/6/2022).
A former bank employee was found guilty of money laundering in the trial, which also included testimony about murder. Federal prosecutor Alice de Chambrier welcomed the ruling as ‘good for transparency’.
In this case, prosecutors accused a former relationship manager of helping to conceal the origin of criminal money for clients of more than 146 million Swiss francs (Rp 2.2 trillion) in transactions, including 43 million francs (Rp 666 billion) in cash, some of which was entered into suitcase.
The court said it found Credit Suisse’s shortcomings relating to managing client relationships with criminal organizations, as well as in monitoring the implementation of anti-money laundering rules.
“This shortcoming allows the withdrawal of the assets of the criminal organization, which is the basis for the sentence of a former bank employee for qualifying money laundering,” the court said.
“The company can prevent violations if it has fulfilled its organizational obligations,” the presiding judge said in passing the verdict, adding the employee’s former supervisor had acted passively.
Credit Suisse was fined 2 million Swiss francs (Rp 31 billion). The court also ordered the confiscation of assets worth more than 12 million francs (Rp 186 billion) held by drug gangs at Credit Suisse, and ordered the bank to release more than 19 million francs (Rp 294 billion), an amount that could not be confiscated due to internal shortfalls in Credit Suisse.
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.
The presiding judge said he had failed to fulfill his role in the bank’s ‘first line of defense’.
The sentence was handed down after judges looked into whether Credit Suisse and its former employees did enough to prevent cocaine smuggling gangs from laundering profits through banks from 2004 to 2008.
However, both Credit Suisse and the former employee have denied wrongdoing. Switzerland’s second-largest bank said it would appeal the verdict.
Credit Suisse said the case emerged from an investigation that spanned more than 14 years.
“Credit Suisse continues to test its anti-money laundering framework and has strengthened 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.”
Credit Suisse shares closed up 0.4%, while the European banking sector index rose 0.3%. They are down more than 40% in the last year.
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