Credit Suisse arraigned for failure to prevent money laundering by drug ring
Swiss prosecutors have indicted Credit Suisse Group AG and one of its ex-bank managers over the creditor's failure to prevent money laundering by a Bulgarian drug ring. The Office of the Swiss Attorney General said that the Zurich-based bank did not take "reasonable and required" organizational measures to protect against the laundering of cash made from cocaine sales which was then used to buy real estate in Bulgaria and Switzerland.
Banks can be criminally targeted in Switzerland if they are seen as not doing enough to screen clients for evident ties to unlawful activities. On its part Credit Suisse expressed "astonishment" at being charged in a probe that has already lasted for over 12 years. The bank refuted all allegations of "organizational deficiencies" and said it means to "vigorously" defend itself.
It was in 2008 that prosecutors began investigating into a Bulgarian wrestler-allegedly turned-drug trafficker. Seven years into the probe, it enlarged to include associates of the Bulgarian – once a Credit Suisse executive and ex-bank employee and the bank itself. In 2017, the Bulgarian's employer was convicted of serious money laundering. The main offence of the Bulgarian was smuggling over 4 million Swiss Francs ($4.5 million) in small notes from Barcelona into Switzerland.
Recently, the case against the ex-bank employee was dropped leaving charges against Credit Suisse and one of its ex-managers. The ex-bank manager, a woman, used a "back-to-back" credit structure to actively help the drug ring launder 16 million Francs. The prosecutors said that the woman helped conceal the illegal sources of transactions worth more than 140 million Swiss Francs.
Credit Suisse was indicted of failing in its essential compliance responsibilities including failure to freeze 35 million Francs subject to a seizure order in 2007. That it released money against the attorney general's orders was rejected by the bank saying, "These outgoing payments were all agreed with the Office of the Attorney General at the time". But the prosecutors maintained that Credit Suisse "had been aware of these deficiencies from at least 2004" and "the fact that the bank let it continue till 2008, or even beyond, impeded or frustrated the detection of the money laundering activities".