King of Bulgarian cocaine: Credit Suisse is condemned but Swiss justice lacks bite

Today, Credit Suisse's trial in the Federal Criminal Court ended in Bellinzona. The bank was found guilty of "organisational failure" (Art. 102 Swiss Criminal Code), but the penalty remains far too lenient: CHF 19 million in compensation and a fine of 2 million. The court found that the bank, which generated CHF 22.7 billion in revenue in 2021, had failed to take the necessary measures to prevent the laundering of millions of Swiss francs from cocaine trafficking. It noted the existence of "shortcomings within the bank [...], both in the monitoring of banking relations linked to the criminal organisation and in the monitoring of anti-money laundering rules by the hierarchy, the legal department and the compliance department". The former Credit Suisse client manager was given a 20-month suspended prison sentence, along with a suspended fine of some CHF 30,000 for aggravated money laundering.

The facts at the heart of this case reflect the problematic business model of Switzerland's second largest bank. As early as 2004, Credit Suisse had established business relations with the leader of a Bulgarian criminal network active in cocaine trafficking and one of his acolytes, both registered with the banking institution as real estate entrepreneurs. According to the Federal Prosecutor's Office, the client manager had allowed the traffickers to launder CHF 55 million in four years – including tens of millions deposited in cash at the counters of the Zurich main branch. However, the elements before 26 June 2007 are time-barred because Credit Suisse used tactical manoeuvres to delay the process.

This affair, like the revelations made about Credit Suisse by the "Suisse Secrets" in February, exposed the shortcomings of Switzerland’s legal system which does not make it possible to fight against money laundering effectively. With the conviction of Falcon Bank in December 2021, it is only the second time in Switzerland that a bank has been found guilty of "organisational failure". Others are, however, under criminal investigation: PKB PrivatBank, Banque Cramer & Cie and J. Safra Sarasin (the Petrobras scandal) as well as Lombard Odier (the Gulnara Karimova funds). If it wants to stop maintaining its financial centre as a haven for economic crime, Switzerland must strengthen surveillance systems and introduce deterrent penalties. In Parliament, political pressure is growing to provide the financial market supervisory authority, Finma, with "solid instruments allowing it to effectively prosecute white collar crimes", as requested by a postulate submitted by National Councillor Prisca Birrer-Heimo.

More information here or from:

Oliver Classen, Spokesperson, +41 44 277 79 06, oliver.classen@publiceye.ch

David Mühlemann, Legal and finance expert, +41 44 277 79 24, david.muehlemann@publiceye.ch