Switzerland’s attorney general has filed criminal charges against Credit Suisse (CSGN.SW) following a 12-year investigation into the bank’s historic dealings with the Bulgarian mafia.
The Office of the Attorney General of Switzerland on Thursday filed several criminal indictments linked to individuals and organisations “involved on a grand scale in the international trafficking of narcotics and in laundering the proceeds”. Credit Suisse and one of its former executives were hit with indictments.
Credit Suisse said it was astonished by the “groundless” charges and said it would “defend itself vigorously” in court.
The charges relate to the Bulgarian mafia’s efforts to smuggle drugs into Europe and launder the proceeds through the Swiss banking system in the early 2000s.
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Prosecutors say an unnamed former Bulgarian wrestler was enlisted by the mafia for drug smuggling after the fall of communism in the country in 1990.
The wrestler, who later settled in the Swiss area of Valais, organised the smuggling of “several tens of tonnes of cocaine from South America to Europe by boat and by plane” between 2000 and 2012. The individual has already been sentenced to “lengthy prison terms in several European countries,” prosecutors said.
Thursday’s charges related to money laundering from these activities. Prosecutors said the criminal gang paid cash into Swiss bank accounts between 2004 and 2007, working to “conceal the funds of criminal origin in order to protect them from the long arm of the law.”
The office of the Swiss Attorney General opened an investigation in 2008. The investigation ultimately expanded to included ten individuals, including an alleged Bulgarian mafia boss, his “concubine” ex-wife (in the words of the prosecutor), Credit Suisse, and two of the bank’s former employees.
On Thursday, prosecutors filed indictments against three people in the case, including an unnamed former Credit Suisse executive, and the bank itself.
The Attorney General’s office said the unnamed former Credit Suisse executive “actively assisted” the Bulgarian mafia in laundering an estimated CHF16m and carried out transactions for the gang worth CHF140m. Prosectors allege the female executive ignored red flags.
Credit Suisse is charged with failing to put in place adequate anti-money laundering processes, despite being legally required. The prosecutor said systems at the bank were so poor the gang was able to withdraw CHF35m even after the Attorney General issued the bank with a seizure order.
Other charges have been levied against the former Bulgarian wrestler and an unnamed business associate who helped him set up “straw man” companies in Switzerland, Austria and Cyprus. Prosecutors issued three other “summary penalty orders” against others involved, stopping short of criminal charges.
Credit Suisse said it “note[s] with astonishment” the charges, which it called “meritless” and “groundless”. The bank said it was also “convinced that its former employee is innocent.”
Credit Suisse said the attorney general was measuring the bank against money laundering rules and standards that were only introduced after the period in question. It added that it had “significantly expanded and strengthened” its anti-money laundering operations since 2007.
“The bank rejects the allegations about supposed organizational deficiencies and intends to defend itself vigorously,” the bank said.
If unsuccessful, Credit Suisse could face a fine of up to CHF5m and be forced to give up any profits made from the criminal activities.
Shares were unchanged in Zurich.
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