Switzerland’s second-largest bank, Credit Suisse, has been convicted and fined by the Swiss Federal Criminal Court for its involvement in a money-laundering case linked to a Bulgarian drug cartel. This is the first time in Swiss history that a major bank has been convicted in a criminal case.
The Swiss banking industry has been known for its strict secrecy in the past, and the case is seen as a test of the judicial system’s intention to impose tougher regulations on the sector.
The court said Credit Suisse had shortcomings in managing customer relationships with criminal organisations and monitoring the implementation of anti-money laundering rules. Between 2004 and 2008, the bank and former employees failed to do enough to stop Bulgarian cocaine traffickers from using the bank to launder money.
Credit Suisse faces a fine of 2 million Swiss francs (about $2.1 million) and is required to pay the Swiss government about 19 million Swiss francs in compensation. The former employee was also sentenced to 20 months in prison and a fine for money laundering, both suspended.
Both Credit Suisse and former employees have denied wrongdoing. Credit Suisse said it would appeal the decision, which involved events that occurred nearly 14 years ago and the rules and principles on which prosecutors brought their case did not apply at the time.
Mark Pieth, a money-laundering expert at the University of Basel in Switzerland, said on the eve of the trial that the case could be a watershed moment for Switzerland, which is important because Switzerland takes legal action against a top bank.
Swiss private banks have adopted tougher anti-money laundering checks after international regulators cracked down on money laundering. Still, Switzerland has a huge gap in preventing money laundering, said Marc Herkenrath, deputy director of Swiss Transparency International.
The media revealed that the former employee was former Bulgarian tennis star Elena Pampoulova Bergomi, who had worked at Credit Suisse as a relationship manager and had left Credit Suisse in 2010.
Prosecutors said Bergomi had an informal financial relationship with the ex-Bulgarian wrestler and estate developer Evelin Banev, a major figure in a European cocaine smuggling ring, and the court heard that the former tennis player regularly received information from the wrestler’s circle. From the people there, they get bags full of cash, often worth 400,000 or 500,000 Swiss francs.
Banev, who was convicted of drug trafficking in Italy in 2017 and money laundering in Bulgaria in 2018, is not a defendant in the Credit Suisse case.