Cocaine. Cash stashed. A Bulgarian wrestler who is having a hard time. During the trial in February, the shady details kept Swiss finance interested for days. Credit Suisse Group AG was accused of not stopping a drug dealer from laundering millions of dollars, and it was said that the company didn’t do enough to stop it.
On Monday, the jury decided that the bank was guilty. This was the first time that a major Swiss bank had ever been found guilty of a crime. The top criminal court in Switzerland made the decision on Monday afternoon. A former relationship manager at the bank was also found guilty of money laundering.
The woman was given a 20-month prison sentence that was put on hold. Credit Suisse will have to pay a $2.1 million fine and a 19-million-franc claim, which is the amount of money that the bank let be laundered.
The judge’s decision is another blow to Credit Suisse’s already damaged reputation. The company had said that the crimes happened during a time when compliance rules were not as strict. It has been dealing with a number of scandals, which have caused its stock price to drop to near-record lows. Later this year, it may face a second criminal indictment in a separate case.
In a statement, the bank said it will appeal the decision and said that the investigation before the trial has been going on for more than 14 years.
The bank said, “Credit Suisse is always testing its anti-money laundering framework and has been making it stronger over time to keep up with changing regulatory standards.”
Credit Suisse said that the case shouldn’t have been brought up so many years after the events it was about. Late in 2020, when Swiss prosecutors publicly accused the bank of money laundering crimes that happened between 2004 and 2008, the bank said it was “shocked.”
But Swiss law says that local prosecutors can file criminal charges against banks if they think the banks didn’t do enough to check clients and their money for obvious links to illegal activity. The 515-page indictment says that the former Credit Suisse manager, whose name can only be given as “E.,” accepted deposits of used bank notes that were often worth more than 500,000 euros ($528,650). She said in her testimony that because Bulgaria’s banks were in bad shape at the time, there were a lot of cash deposits.
In the same case, two other Bulgarians were found guilty of being part of a criminal group and doing a lot of money laundering. One got a 36-month prison sentence, but 18 months of it were suspended. The other got a 12-month sentence that was also suspended.
A lawyer for E. said that they would challenge the decision made on Monday.
Grégoire Mangeat, E.’s lawyer, said that this decision puts the responsibility for money laundering on people who haven’t had much training or experience. “This raises a number of legal issues, which is why our client has decided to fight and defend her position with all her might.”
Drug Mules
The main Bulgarian involved in the scandal, who was later given a 20-year prison sentence for his drug crimes, was in charge of bringing tens of metric tonnes of cocaine into Europe from 2002 to 2012. He did this by using boats, planes, and drug mules who were willing to swallow rubber balls filled with cocaine.
On the second day of the February trial, the judge said that any evidence from before February 2007 would not be taken into account because aggravated money laundering charges can only go back 15 years. This was a quick win for Credit Suisse. But then the court heard details that showed how the bank wasn’t following the rules.
E. said in court that she had “no banking background” and that it took her three tries to pass her first test to get into the banking industry. Later, she said that Credit Suisse didn’t freeze or block the Bulgarian’s accounts after he was arrested on drug trafficking charges because she was told to “wait and see if this information will be confirmed.”
