Swiss bank guilty of drug money laundering

Switzerland’s second-largest bank, Credit Suisse, has been discovered guilty and fined for failing to uncover a money-laundering scheme involving a drug cartel, Reuters reported on Monday.

According to the report, a former bank worker accepted around 146 million Swiss francs ($152 million) in bank balances from a Bulgarian cocaine smuggling ring between 2004 and 2008, while hiding the criminal origins of the funds. The Swiss Federal Criminal Court said on Monday that Credit Suisse had failed to uncover the scheme and implement anti-money laundering regulations. Under Swiss law, a company can be held liable if it fails to take action to prevent a crime.

“These shortcomings made it possible to withdraw the assets of the criminal organization, which was the basis for the conviction of the former bank employee for qualified money laundering… The company could have prevented the violation if it had fulfilled its organizational obligations,‘ the court said, as quoted by Reuters, noting that the bank’s management was ‘passive‘ while handling the case.

According to the former employee, her superiors were made aware of the origin of the money, but the bank continued to organize the funds. Credit Suisse denied that the funds came illegally, saying the clients in question were posing as owners of legitimate construction, leasing, and hotel businesses.

Both Credit Suisse and its former employee have denied any wrongdoing.

Credit Suisse now meets a fine of two million Swiss francs ($2.1 million), while the former employee has also been fined and sentenced to a 20-month suspended prison sentence. The court also ordered the seizure of drug cartel funds held at the bank.

Credit Suisse reported on Monday that it would appeal the conviction.