Credit Suisse faces verdict in cocaine lawsuit | world news


By Brenna Hughes Neghaiwi and John O’Donnell

ZURICH (Reuters) – Swiss judges are due to decide on Monday whether Credit Suisse failed to prevent money laundering linked to an alleged cocaine trafficking gang in Switzerland’s first criminal trial against one of its major banks.

Credit Suisse and one of its former employees are accused of enabling a suspected Bulgarian cocaine trafficking gang to launder millions of euros from 2004 to 2008.

The case – which included testimony about murders and money stuffed into suitcases – centers on the relationship Credit Suisse and its ex-employee had with former Bulgarian wrestler Evelin Banev and several associates, including two are also charged in the case.

Switzerland’s second largest bank, when asked for comment, reiterated that it dismissed all allegations as baseless and said there was no wrongdoing on the part of its former employee. .

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The case is being watched closely in Switzerland, where it is seen as a test for prosecutors taking a potentially tougher line against the country’s banks.

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

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

“What is significant in 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 controls after an international regulatory crackdown to prevent money laundering.

Nevertheless, Switzerland still has huge gaps in preventing money laundering, said Marc Herkenrath, deputy director of Transparency International in Switzerland.

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

“Even though Swiss law allows a company to be held liable for wrongdoing, there have been very few court convictions. This case is important and sends a strong signal to other Swiss banks,” Herkenrath said.

MURDERS AND COCAINE SMUGGLING

In the court case, Swiss prosecutors are seeking around 42.4 million Swiss francs ($45.86 million) in compensation from Credit Suisse.

State prosecutors accuse the former relationship manager, who left Credit Suisse in 2010, of helping to conceal the criminal origins of clients’ money through more than 146 million Swiss francs in transactions , including 43 million francs in cash, part of which was stuffed into suitcases.

The former relationship manager, whose identity cannot be disclosed under Swiss confidentiality rules, denies any wrongdoing.

In court hearings in February, the former relationship manager said Credit Suisse had been made aware of murders and cocaine trafficking believed to be linked to a Bulgarian gang, but continued to handle cash that made now the subject of a trial before the Swiss Federal Criminal Court.

The former banker told the hearings that she informed her officials of the events, including two murders, associated with the clients, but they nevertheless decided to prosecute the company.

Credit Suisse disputed the illegal origin of the money, saying former Bulgarian wrestler Banev and his entourage operated legitimate construction, rental and hospitality businesses.

Banev is not charged in Switzerland but was convicted in Italy for drug trafficking in 2017 and in Bulgaria in 2018 for money laundering. He was arrested in September in Ukraine as countries such as Bulgaria and Romania demanded his arrest.

A lawyer for Banev in Sofia declined to comment.

Banev’s lawyer said in February that he denied any involvement in money laundering through Credit Suisse.

(Reporting by Brenna Hughes Neghaiwi and John O’Donnell; Additional reporting by Tsvetelia Tsolova. Editing by Jane Merriman)

Copyright 2022 Thomson Reuters.

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