Switzerland charges Credit Suisse employees in Bulgarian real estate money laundering scheme

Swiss prosecutors charged an unnamed former Credit Suisse manager and two alleged members of the criminal organisation had also been indicted in the Swiss Federal Criminal Court.

The charges relate to alleged failings related to a Bulgarian crime ring involving top-level wrestlers accused of laundering cocaine trafficking proceeds more than a decade ago.

Switzerland's attorney general (OAG) said in a statement that:

• "(Credit Suisse) is accused of failing to take all the organisational measures that were reasonable and required to prevent the laundering of assets belonging to and under the control of the criminal organisation," it said.

The trafficking dated to between 2004 and 2008 and the fall of communism in Bulgaria, when top-level wrestlers lacking financial support turned to criminal organisations for help, the OAG said.

Credit Suisse said it "unreservedly" rejected the allegations and it was convinced its ex-employee was innocent.

• "Credit Suisse takes note with astonishment of the decision...to bring charges," it said.

Switzerland's second-largest bank said its anti-money laundering measures have since been improved, adding that maximum fine Switzerland's top criminal court could impose 5 million Swiss francs ($5.7 million).

The OAG said that the wrestler involved had since been sentenced to lengthy prison terms in several European countries.

• "One of (the wrestlers) built up and managed a hierarchical and compartmentalised criminal structure which aimed to make money for its members by trafficking in cocaine," it said.

The proceeds were then paid into accounts in Switzerland,

• Where the money was laundered to buy Swiss and Bulgarian real estate, the attorney general said.

It alleged that Credit Suisse acted as a bank for these activities, adding that the indicted former bank executive oversaw transactions worth more than 140 million Swiss francs for the group. ($1 = 0.8832 Swiss francs) (Reporting by Brenna Hughes Neghaiwi; Editing by John Miller and Alexander Smith)

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Switzerland's federal prosecutor has filed charges against Credit Suisse for allegedly facilitating money laundering "on a grand scale" by former Bulgarian clients.

In charges put before Switzerland's Federal Criminal Court on Thursday, investigators said the bank had processed more than SFr140m of transactions for the group, earned from smuggling tonnes of cocaine into Europe and other illegal activities. 

The bank said in a statement it noted the charges with "astonishment" and promised to "defend itself vigorously". 

The prosecutors' indictment, as part of an investigation that has lasted for 12 years, alleges that a senior female executive at the bank systematically ignored or sidestepped money-laundering reporting requirements between 2004-2008 to aid the organisation. She has been separately indicted, but her identity has not been disclosed.

The probe has been in progress for more than a decade, it pointed out, during which prosecutors' original accusations have been wound back as various lines of inquiry have hit legal walls or failed to turn up evidence.

The maximum penalty that can be ordered against the bank is a fine of SFr5m and the disgorgement of profits, Credit Suisse said.

The charges describe a chaotic and unstructured process at the bank more than a decade ago for grouping together suspicious transactions and identifying the beneficial owners of accounts and other financial instruments.

"Credit Suisse had been aware of these deficiencies from at least 2004. The fact that the bank let it continue until 2008, or even beyond, impeded or frustrated the detection of the money laundering activities carried out by the criminal organisation with the aid of the bank executive," the federal prosecutor said in a statement.

The federal prosecutor added that, even after it first issued freezing orders for accounts and transactions in 2007 relating to the Bulgarian group, Credit Suisse's internal controls were so "dysfunctional" that a further SFr35m was drained from accounts before the bank acted to curb its clients' activities.

https://www.reuters.com/article/credit-suisse-gp-bulgaria/update-1-switzerland-charges-credit-suisse-in-bulgarian-money-laundering-probe-idINL1N2IX13H