ZURICH (AP) — A Swiss court on Monday said it has fined Credit Suisse more than $2 million for failing to prevent money laundering linked to a Bulgarian criminal organization a decade-and-a-half ago.
The court also ordered the confiscation of the equivalent of more than $12 million worth of deposits linked to the criminal group and opened with Credit Suisse.
The bank is also on the hook for a compensatory claim of more than $19 million. That's the amount that the court said could not be confiscated due to the bank’s internal failures, which the court said had encouraged the money laundering.
Zurich-based Credit Suisse bank, Switzerland’s second-largest bank after rival UBS, said it will appeal the decision.
A former Credit Suisse employee who prosecutors said contributed to the organization’s ability to protect that $19 million from control of the courts was also found guilty, though the former employee's fine and 20-month sentence were suspended.
Prosecutors said the unnamed former bank employee had helped to execute transactions for the organization between July 2007 and December 2008, “despite the presence of concrete indications as to the criminal origin of the funds.”
Two Bulgarian nationals were also found guilty of participation in a criminal organization and aggravated money laundering for acts committed between May 2005 and January 2009.
The courts said it suspended the sentences and fines for some of the individuals in part due to the passage of time since the alleged crimes took place.
In the original indictment, the Swiss attorney general’s office noted how top-level athletes in Bulgaria, after the fall of communism, “turned towards other sources of income, and numerous wrestlers received approaches from mafia clans.” One unidentified wrestler aimed to cash in by trafficking tons of cocaine through “mules” from South America to Europe by air and sea and then laundering the profits.
The proceeds from the drug sales, often in small denomination notes, entered Swiss bank accounts from 2004 to at least 2007 and were used to buy real estate in Bulgaria and Switzerland.
In February, Credit Suisse reported a fourth-quarter loss of 2 billion Swiss francs ($2.2 billion) as it wrapped up “a year of challenges” marked by bad bets on a hedge fund, set asides for legal costs and accounting changes due to its acquisition of a U.S. investment bank over 20 years ago.
The bank launched a new strategy late last year after a string of setbacks dented its reputation.
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