Switzerland's Second Biggest Bank Fined $2.1 Million In Cocaine Gang's Money Laundering Case

It was during a trial in February, when Credit Suisse Group AG faced charges that it had failed to prevent a drug trafficker from laundering millions. With hazy information surrounding the stashes of cash and cocaine, the final verdict was not given.

But yesterday, the historic verdict came out. Credit Suisse was convicted by Switzerland's Federal Criminal Court for failing to prevent money laundering by a Bulgarian cocaine trafficking gang.

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The ruling, in which a former relationship manager at the Swiss bank was also convicted on money laundering charges, was handed down by Switzerland¡¯s top criminal court on Monday afternoon, as per a Bloomberg report.

A former relationship manager at the bank was found guilty of money laundering and received a 20-month suspended prison sentence. Her ?1.7m fine was also suspended, as per BBC.

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

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

"These deficiencies enabled the withdrawal of the criminal organisation's assets, which was the basis for the conviction of the bank's former employee for qualified money laundering," the court said.

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

Prosecutors alleged that 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, as per Reuters.

On the other hand, the main Bulgarian at the heart of the scandal, who was later sentenced to a 20-year term for his drug offences, had reportedly organized the import of tens of metric tons of cocaine into Europe between 2002 and 2012, using boats, planes and drug mules willing to swallow cocaine-packed rubber balls.

Two other Bulgarians were convicted in the case for participation in a criminal organization and aggravated money laundering. One was given a 36-month prison sentence, with 18 months of it suspended, and the other was handed a 12-month suspended sentence.

The bank had earlier expressed its ¡°astonishment¡± in late 2020 when Swiss prosecutors publicly charged it with money laundering offences, given the alleged crimes took place between 2004 and 2008.

Reuters

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Under Swiss law, local prosecutors can press criminal charges against banks if they believe those institutions didn¡¯t do enough to screen clients and their cash for obvious ties to illicit activity. The former Credit Suisse manager, who can only be named as E. under Swiss reporting restrictions, accepted deposits of used bank notes that regularly exceeded 500,000 euros ($528,650) at a time, according to the 515-page indictment. Cash deposits were very common given the parlous state of Bulgaria¡¯s banks at the time, she said in testimony, as per the Bloomberg report.

The judgment is another blow to the tarnished reputation of Credit Suisse, which had reportedly argued that the crimes date to an era when compliance standards were less stringent. It has been struggling with a series of scandals that have sent its shares to near-record lows and may face a second criminal indictment in an unrelated case later this year.

The ruling also marks another headache for the second-biggest bank of Switzerland, which has been reeling from billions in losses racked up via risk-management and compliance blunders, as per Reuters.

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