X4 bankers on trial for not doing their CDD properly….!!!

A trial of four bankers in Switzerland offers insight into how members of Russian President Vladimir Putin’s inner circle used Swiss bank accounts to sidestep U.S. sanctions.

The trial is seen as a test of the country’s will to keep out illicit money, after stepping up anti-money-laundering efforts in recent years. It might also send a message on Switzerland’s ability to root out evasion through its borders of the fresh sanctions over Russia’s invasion of Ukraine, a focus for U.S. authorities.

Swiss financial regulator Finma said in 2018 that there were serious shortcomings in Gazprombank Switzerland’s anti-money-laundering processes.

THE TRIAL

The bankers, three Russian-born and one Swiss, were charged with breaking Swiss anti-money-laundering law.

• They face potential seven-month suspended sentences and two years of probation.

A Gazprombank Switzerland spokesman said each denies the charge.

• The lawyer for one of the men said “all defendants will attend and defend their interests in court.”

In spring 2014,

• Companies owned by a concert cellist [Sergei Roldugin] close to Mr. Putin opened bank accounts at Gazprombank Switzerland, an arm of the Russian state banking giant in Zurich.
• A Russian media company, whose bank-owner had just been sanctioned over Russia’s annexation of Crimea, paid the cellist’s accounts a stream of dividends.

A trial starting in Zurich district court Wednesday is to decide whether the four bankers

• Adequately vetted the cellist, Sergei Roldugin, when they opened the accounts, and
• If they did enough to probe the multimillion-dollar payments.

US SANCTION against Mr. Roldugin

Last year, a U.S. sanctions notice against Mr. Roldugin and his wife described him as part of a system managing the Russian president’s offshore wealth.

The indictment said.

• “It is notorious that the Russian President Putin officially has an income of only CHF100,000 [equivalent to around $106,000] and is not wealthy,
• But in fact has enormous assets which are managed by people close to him,”

The Zurich prosecutors said.

• Those circumstances “would have resulted in a considerable and profound need for clarification,”

CDD FAILS

The Zurich prosecutors alleged in a November indictment that Mr. Roldugin’s ownership of the companies and the dividend payments were implausible and needed urgent clarification.

On paperwork to open the bank accounts,

• Mr. Roldugin’s job was listed as musician and
• A compliance-screening database search was attached showing that he wasn’t a politically exposed person.
• It said his assets came from his job, loans and dividends.

Also attached were printouts of the website of

• The Mariinsky Theater in St. Petersburg, Russia, where Mr. Roldugin has been a guest conductor, and
• Of the Russian media company making the dividend payments, the Zurich prosecutors said.

According to the November indictment,

• Roldugin’s close relationship with Mr. Putin wasn’t registered at Gazprombank Switzerland when two companies listing the cellist as owner opened accounts in 2014.
• That was despite Mr. Roldugin being godfather to Mr. Putin’s eldest daughter and the men’s friendship having been reported on for years, the prosecutors said.

The prosecutors said.

• The accounts also warranted more checks because an owner of the Russian media company was Bank Rossiya, which the U.S. sanctioned in March 2014 over Russia’s Crimea annexation, calling it the personal bank of senior Russian officials.

According to the November indictment.

• Gazprombank Switzerland closed the accounts connected to Mr. Roldugin in September 2016,
• That was five months after Finma opened a preliminary investigation at the bank.
• Finma has said it probed 30 banks after the Panama Papers data leak in 2016, which had included some of Mr. Roldugin’s financial records. 

Source

https://www.wsj.com/articles/trial-targets-bankers-who-moved-money-for-putins-cellist-friend-386b5fd1?mod=business_minor_pos4

Write to Margot Patrick at margot.patrick@wsj.com and Patricia Kowsmann at patricia.kowsmann@wsj.com