Credit Suisse found guilty over Bulgarian drug money failings

Bank ignored signs of criminality including suitcases of cash, Switzerland’s top criminal court rules

Credit Suisse has become the first domestic bank to be found guilty of a corporate crime by Swiss authorities after a court found the lender failed to stop the laundering of Bulgarian drug money.

The verdict was handed down in the southern Swiss city of Bellinzona by the country’s highest criminal court on Monday. Judges imposed a SFr2 million fine on the bank and ordered it to pay €18.6 million in compensation to the Swiss government.

An ex-Bulgarian tennis star, Elena Pampoulova-Bergomi, who was a former relationship manager at the bank, was also found guilty of money laundering offences.

The case centred on Credit Suisse’s role in accepting millions of euros in deposits from a group of Bulgarian clients between 2004 and 2008. Judges ruled that the bank ignored obvious red flags — including huge sums of cash being brought in suitcases and two assassinations — that hinted at the possible criminal origins of the funds.

“The court found deficiencies within the bank during the period in question both with regard to the management of client relations with the criminal organisation, as well as with regard to the monitoring of the implementation of anti-money laundering rules by management, the legal service and the compliance department,” said the Federal Criminal Court .

The case is the first time a Swiss-owned and domiciled bank has been subjected to criminal proceedings.

Prosecutors detailed in their case how Pampoulova-Bergomi had built and maintained a relationship, thanks to her sporting renown, with the former Bulgarian professional wrestler, Evelin Banev, who was at the head of a major European cocaine smuggling operation.

Shot dead

Pampoulova-Bergomi regularly collected suitcases of cash worth more than €500,000 from individuals in Banev’s circle, including from one client who was shot dead outside a restaurant in Sofia in 2005.

During the trial earlier this year, Pampoulova-Bergomi claimed that for years the bank paid almost no attention to compliance as it raced to win rich eastern European clients.

Banev was convicted of drug trafficking in Italy in 2017 and money laundering in Bulgaria in 2018. He was not a defendant in the Swiss case. After disappearing, he was arrested last year in Ukraine and is facing extradition to Romania and Bulgaria to face further criminal charges.

In December, the now-defunct Abu Dhabi-owned Falcon bank, which had operations in Switzerland, became the first bank ever to be found guilty under the Swiss criminal code of money laundering offences.

Swiss prosecutors had been seeking SFr 42 million (€40 million) in penalties from the bank.

Credit Suisse said i that it would appeal against the court’s ruling. It added that it was “continuously testing its anti-money laundering framework and has been strengthening it over time, in accordance with evolving regulatory standards”.

Pampoulova-Bergomi’s lawyer said she would appeal against the “unfounded and unfair” decision.

“This judgment places the responsibility for money laundering on people without any serious training or experience,” said Grégoire Mangeat. — Copyright The Financial Times Limited 2022