Court Finds Credit Suisse Guilty of Facilitating Money Laundering Tied to Cocaine Ring

The logo of Swiss bank Credit Suisse is seen at a branch office in Zurich on Nov. 3, 2021. Arnd WIegmann/Reuters

Swiss bank Credit Suisse was found guilty by the country’s Federal Criminal Court on June 27 for failing to prevent money laundering by a Bulgarian cocaine trafficking gang in the first such criminal trial Switzerland has seen against one of its major banks.

The case involved millions of euros in bank deposits made by the trafficking ring to Credit Suisse between 2004 and 2008. The deposits came as a result of drug sales activities and were eventually used to buy real estate in Switzerland and Bulgaria.

According to prosecutors, a former bank employee built an informal financial relationship with Bulgarian wrestler Evelin Banev, a key figure in the cocaine smuggling ring.

The employee, Bulgarian ex-tennis player Elena Pampoulova-Bergomi, is said to have regularly collected bags “full of cash” from people who had relations with the former wrestler, according to the BBC.

“The court found deficiencies within the bank ... with regard to the management of client relations with the criminal organization,” the court said in a statement, the BBC reported. “These deficiencies enabled the withdrawal of the criminal organization’s assets.”

If Credit Suisse had fulfilled its organizational obligations, they could have prevented the infringement, said the presiding judge while handing down the verdict, according to Reuters. The judge also blamed Pampoulova-Bergomi’s superiors at Credit Suisse for being “passive.”

The court has fined Credit Suisse 2 million Swiss francs ($2.1 million) and ordered confiscation of assets worth over 12 million francs ($12.5 million) that the trafficking ring held at Credit Suisse.

Credit Suisse was also ordered to relinquish over 19 million francs ($19.8 million), an amount which could not be confiscated due to the internal failure of the bank. As for Pampoulova-Bergomi, the court gave her a 20-month suspended prison sentence while also suspending her fines of roughly $2 million.

An Impactful Decision

This is the first time that a Swiss bank has been subject to such criminal proceedings, thus potentially making the court judgment a critical one. Credit Suisse is Switzerland’s second-largest bank after UBS.

“Even though Swiss law makes it possible to hold a company to account for wrongdoing there have been very few court convictions. This case is significant and sends a powerful signal to other Swiss banks,” Marc Herkenrath, Deputy Director of Transparency International in Switzerland, told Reuters.

According to Swiss laws, a company can be held accountable for failing to take necessary measures to prevent a crime from taking place. Following an international regulatory crackdown aimed at preventing money laundering, private banks in Switzerland have adopted stricter anti-money laundering checks.

In a statement, Credit Suisse said that the bank is “continuously testing its anti-money laundering framework” and has been strengthening it over time in accordance with regulatory standards. The bank had reported a fourth-quarter loss of about $2.2 billion.

“Credit Suisse Group has taken note of the Swiss Federal Criminal Court’s decision to impose a fine of CHF 2 million against Credit Suisse AG for certain historical organizational inadequacies (article 102 of the Swiss Criminal Code) for the period between July 2007 and December 2008,” said the bank in an emailed statement to The Epoch Times. “The investigation dates back more than 14 years. The bank will appeal the decision.”

“Credit Suisse is continuously testing its anti-money laundering framework and has been strengthening it over time, in accordance with evolving regulatory standards. Generating compliant business growth in line with legal and regulatory requirements is key for Credit Suisse.”

The Associated Press contributed to this report.