Credit Suisse leak alleges bank stashed billions in ‘illicit’ funds

Credit Suisse was accused by an international investigation carried out by several media of hosting funds of criminal or illicit origin.

The Swiss bank said it “strongly rejects the allegations and insinuations about the bank’s purported business practices.”

The investigation by the Organised Crime and Corruption Reporting Project (OCCRP), a consortium of 47 media including France’s Le Monde, Britain’s The Guardian, the US’ Miami Herald, and Germany’s Süddeutsche Zeitung, is based on data from more than 18,000 bank accounts hosted since the early 1940s and until the late 2010s.

The data, given anonymously to Süddeutsche Zeitung a little over a year ago, concern accounts belonging to 37,000 people or companies, for a total amount of more than $100 billion (€88 billion), “of which at least eight billion are linked to clients identified as problematic,” Le Monde said.

Süddeutsche Zeitung said the data points to the bank having accepted “corrupt autocrats, suspected war criminals and human traffickers, drug dealers and other criminals” as customers.

Credit Suisse said the allegations are “predominantly historical” and that “the accounts of these matters are based on partial, inaccurate, or selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct.”

The bank said it had reviewed a large number of accounts potentially associated with the allegations, and about 90% of them “are today closed or were in the process of closure prior to receipt of the press inquiries, of which over 60% were closed before 2015.”

As for accounts that remain active, the bank said it is “comfortable that appropriate due diligence, reviews and other control related steps were taken in line with our current framework.” The bank also said the law prevents it from commenting on “potential client relationships.”

‘Immoral’ secrecy laws

The vast majority of the people listed in the data come from developing countries: in Africa, the Middle East, Asia and South America, and clients domiciled in Western Europe account for only 1% of the total.

Among them are King Abdullah II of Jordan and Kazakh President Kassym-Jomart Tokayev, as well as officials from several Arab countries “who took out large sums of money from their countries at the time of the ‘Arab Spring'”, Le Monde said.

Credit Suisse, the second-biggest bank in Switzerland, has been rocked by a series of scandals over the past year. In March, the bank was rocked by the collapse of the Greensill financial company, in which some $10 billion had been committed through four funds, and then by the implosion of the American fund Archegos, which cost the bank some $5 billion.

In October, it was also hit with $475 million in penalties by US and UK authorities for its loans to state-owned companies in Mozambique, which were at the centre of a corruption scandal.

Its new president, Antonio Horta-Osório, elected at the end of April in the midst of the turmoil, has launched a reorganisation of the bank’s activities with the aim of putting risk management back at the heart of the bank’s culture.

But the Portuguese banker, who had built a solid reputation for turning around British bank Lloyds, was himself tainted by press revelations in December about quarantine rules he had broken. In mid-January, he resigned, handing over to Axel Lehmann, a Swiss banker renowned for his expertise in risk management.

At the beginning of February, a trial was also opened before the Federal Criminal Court in Bellinzona, in the Italian-speaking part of Switzerland, concerning a Bulgarian criminal organisation.

Switzerland has sought in recent years to shed its image as a haven for tax evasion, money laundering and the embezzlement of government funds, practices carried out through the misuse of its banking secrecy policies. But those laws still draw criticism.

The Sueddeutsche Zeitung published an excerpt from a statement by the source of the leak.

“I believe that Swiss banking secrecy laws are immoral,” it said. “The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders.”

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