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Suisse Secrets: leak reveals how Credit Suisse accepted many millions of euros in dirty money

An investigation by more than 160 journalists in 39 countries based on a leak shared by the German newspaper Süddeutsche Zeitung shows how, over the years, Credit Suisse opened and maintained secret accounts controlled by corrupt politicians, dictators, drug traffickers, and other criminals.

It was close to António Horta-Osório, the Portuguese banker who was forced to resign a month ago as chairman of Credit Suisse, after assuming that he violated the mandatory quarantine imposed by the anti-Covid restrictions on travels he made to the Kingdom. Kingdom did not have to deal with a new headache for what is Switzerland’s second-largest bank. A massive leak from Credit Suisse with details about almost 100 billion euros deposited in 18,000 bank accounts of 30,000 customers, between individuals and companies, shows how the bank hid the fortunes of dozens of unsavory customers around the world. , involved in cases of torture, drug trafficking, corruption, money laundering schemes, and other crimes.

Among Credit Suisse’s most dubious clients are some individuals convicted in court who, even so, after that, managed to open or maintain bank accounts.

The information leak was delivered almost a year ago to the Süddeutsche Zeitung, one of the largest German newspapers, the same one that obtained the Panama Papers files, and was shared with an investigative journalism consortium, the OCCRP (Organized Crime and Corruption Reporting Project). ), and 46 media in 39 countries, including Expresso in Portugal, Guardian in the United Kingdom, Le Monde in France, and the New York Times in the United States.

More than 160 journalists came together to investigate, over the course of months, the data shared by the Süddeutsche Zeitung, focusing on the cases of the most problematic customers, where the way Credit Suisse has handled verification on who its clients are and the criteria it has applied to accept and maintain their accounts, including the lack of scrutiny on the origin of the fortunes deposited there and the profile of the holders of these fortunes.

Doubtful clients include, for example, the financial adviser to former Egyptian dictator Hosni Mubarak and his secret service chief, Omar Suleiman, responsible for many human rights violations; General Khaled Nezzar, former defense minister and leader of a military junta in Algeria who is on trial in Switzerland for war crimes and crimes against humanity; or a cocaine trafficking network in Bulgaria which is also on trial, in which the bank is accused of having aided in the money laundering scheme by allowing this criminal organization to operate dozens of bank accounts and eight safes between 2004 and 2007.

The list also includes Venezuelan officials and politicians involved in corrupt payments related to the state oil company PDVSA — and whose names are known in Portugal, such as Nervis Villalobos, Hugo Chávez’s former deputy energy minister, who has been being investigated in Spain, in the United States and also in a criminal case that the DCIAP (Central Department of Investigation and Criminal Action) has ongoing on alleged bribes paid by Grupo Espírito Santo in Venezuela.

Regarding Portugal, Credit Suisse kept dozens of accounts for the Portuguese-Angolan Álvaro Sobrinho, former president of Banco Espírito Santo Angola (BESA), and for Hélder Bataglia, president of Escom and former director of BESA, part of which has already after the criminal investigations that have been taking place in Lisbon since 2011 related to these clients were made public.

Several Angolans were also identified as problematic. José Filomeno dos Santos, the son of former president José Eduardo dos Santos who was at the head of the Sovereign Fund of Angola. Filomeno opened an account in Credit Suisse in 2008, which reached 18 million Swiss francs the following year, although at that time he was still taking his first steps as a businessman. The account was closed in 2013. The son of the former head of state was sentenced to five years in prison in 2020, for crimes of fraud, embezzlement, and influence peddling, in connection with a transfer of 500 million dollars of public funds from the National Bank of Angola.

In addition to Zenu, it was possible to identify in the Suisse Secrets the current president of the Angola Stock Exchange, António Gomes Furtado, who had two accounts at the bank between 1998 and 2013, one of them with almost five million euros, when he was an employee of the National Bank of Angola, where he became part of the audit board. Neither José Filomeno dos Santos nor António Gomes Furtado responded to requests for comment sent by Expresso, the OCCRP and the Süddeutsche Zeitung.

Bank says it complies with the law

In a short and generic response to a series of detailed questions that were sent by media partners in the investigation, Credit Suisse says that the bank “operates in compliance with all applicable global and local laws and regulations”, underlining that “a series of measures important in the context of Swiss financial reforms” have been implemented in recent years. “Considerable investments have been made in compliance and in the fight against financial crime.”

The Suisse Secrets have accounts opened in the 1940s, although more than two-thirds were created after 2000, many of which were still operational in the last decade. The investigation revealed that around 200 of these accounts had balances of 100 million Swiss francs or more. And that a dozen exceed the threshold of a billion.

These numbers represent less than 1% of Credit Suisse’s portfolio of assets and clients, which is ranked in the financial industry rankings as the 41st largest bank in the world. In all, the institution manages more than 1.5 billion euros, has more than 1.6 million customers and employs almost 50 thousand employees.

As for the accounts of more than fifty clients identified as problematic by the project’s journalists, they reached almost eight billion euros, considering the sum of their maximum balances.

For the source of the information leak that sent this data to the Süddeutsche Zeitung, “Swiss bank secrecy laws are immoral” and “the pretext of protecting financial privacy is just a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders”.

Swiss banking secrecy, one of the strongest and most famous in the world, because it can lead to arrest people who share confidential information about clients and accounts, became law in 1934. Its high level of secrecy was justified at the time by the need to protect the assets of Jewish clients during the Nazi regime, but this opacity allowed many clients who wanted to hide dirty money to seek out accounts in Zurich or Geneva.

In the aftermath of the 2008 financial crisis and increasing pressure around tax evasion and how this has affected the ability of many states to generate enough public revenue to meet the education and health costs of their populations, Switzerland eventually joined the automatic exchange of information between tax administrations. Since 2018, Swiss banks have participated in this exchange of information, through a system known as CRS (Common Reporting Standard).

The Swiss Banking Association has promoted the idea that joining this information sharing regime means that the age of confidentiality is over and a new age of transparency has begun.

However, while this is true for customers from developed countries such as Portugal, it is still not so for the more than 90 developing nations that have been left out. The CRS system “imposes a disproportionate financial burden on developing nations, perpetuating their exclusion from the system for the foreseeable future,” says the Suisse Secrets whistleblower. “This situation allows for corruption and starves developing countries, for which tax revenues are very necessary. These countries are therefore the ones that suffer the most from Switzerland’s ability to be a Robin Hood in reverse.”

The business of taking money from the poor

In recent decades, examples have accumulated of how Credit Suisse has contributed to these financial acrobatics, helping to take away the poor so that the rich can accumulate often astronomical levels of wealth.

One of the most notorious cases was that of the former Philippine dictator Ferdinando Marcos and his wife, meanwhile widow, Imelda Marcos. In the 1990s, ten years after Ferdinando ceased to be president of the Philippines, a court forced Credit Suisse to return hundreds of millions of dollars to the country’s public coffers.

The Suisse Secrets include an account that a lawyer, Helen Rivilla, managed to open at Credit Suisse in 2000, despite being convicted in 1992 of helping the Philippine dictator launder money.

There are numerous instances in the data where the bank appears to have ignored the compromising information that was publicly circulated about its customers.

Two months after being prime minister in Ukraine, in 1998, Pavlo Lazarenko became a client at Credit Suisse, accumulating more than seven million euros in his accounts, despite his humble origins and having always worked only in public functions. . Later, in 2006, he was sentenced in the United States to nine years in prison for having been corrupted by a Ukrainian businessman.

“People shouldn’t have access to the system if the money they have is corrupt money,” says Graham Barrow, an independent expert on financial crimes interviewed by the OCCRP. “The bank has a clear duty to ensure that the funds it manages come from a clear and legitimate source.”

The problem is not confined to Credit Suisse, as other major banks have been involved in scandals of this kind. “The irony is that Switzerland has become the place for dirty money to go because it is pure, well-managed, reliable,” admits James Henry, a senior adviser at the Tax Justice Network, a non-governmental organization. in the UK, who studied tax evasion schemes at Credit Suisse. “The problem is this business model of taking money from poor countries.”

The Suisse Secrets show how the bank’s compliance department also appears to have blatantly failed when a Swede, Stefan Sederholm, opened an account in 2008 and managed to keep it open for five years. Although it was reported in 2009 that Sederholm was exploiting girls in Thailand for the sale of sexual services, and he was sentenced to life in prison for human trafficking in 2011, it was not until 2013 that the bank took action and canceled him as client. Or when an Egyptian billionaire, Hisham Talaat Moustafa, was convicted in 2008 of the murder of his girlfriend, but had his account running until 2014. Or when Ronald Li Fook-shiu, despite being sentenced in 1990 to effective prison for having received bribes as chairman of the Hong Kong Stock Exchange, he was accepted as a client a decade later, having accumulated nearly €60 million at Credit Suisse.

In his response, the bank assures that the cases with which he was confronted by journalists belong to the past. “As a world-leading financial institution, Credit Suisse is keenly aware of its responsibility to customers and the financial system as a whole to ensure that the highest standards of conduct are maintained.”

Encourage ignorance

However, more than a dozen employees and former employees interviewed by the OCCRP in recent months portray a “highly toxic” work culture that encourages risk-taking in order to gain more profits. The bonuses that employees receive are associated with the inflow of fresh money into the institution.

“The bank encourages a bank manager to look the other way in the face of an account that he knows is toxic,” a long-time executive at Credit Suisse confesses to OCCRP. “If you close a toxic account, especially a large account with more than 20 million dollars, the bank manager is in a big hole. A hole that is almost impossible to get out of.”

The maintenance of the job may depend on the way of managing the large accounts, in which there actually seem to be two types of rules: those that serve the common customers and those that are reserved only for the richest.

“Customer and account due diligence—say, up to a million dollars level—is very thorough,” explains a former employee. “But when it comes to high net worth accounts, bosses encourage everyone to look the other way and managers are intimidated by their bonuses and job security.”

The testimonies collected to give an idea of ​​how the system has become cynical and easy to maneuver. “The bank’s compliance department is a master of plausible deniability,” a former account manager at Credit Suisse in Zurich tells OCCRP. “Never ask a question you don’t want to know the answer to.” Ignorance is encouraged.

If the clients are very special, but also very problematic, it is best to avoid the usual routes. “Big account holders go directly to top managers, not through the normal private banking system,” explains one executive. “The kind of people the bank attracts are mercenaries and they all seek to enrich themselves first, probably understanding that there is no real relationship with the bank. You’re only there as long as you make money, regardless of how you make that money,” adds a former employee.

The case of the Bulgarian trafficking network that has been on trial is a clear example of how far things can go. It is the first time in Switzerland that a Swiss bank is sitting as a defendant. According to the indictment, Credit Suisse allowed traffickers to launder more than nine million euros from the sale of cocaine.

Prosecutors accuse the bank’s managers of ignoring the clear signals that existed about the customers and the illicit origin of their fortune, including the fact that they deposited suitcases of cash. Even after one of the criminals was murdered and that death was reported in the newspapers as being linked to cocaine trafficking, the accounts were not cancelled. One of the managers involved with these clients admitted in court that the bank taught her all about the importance of Swiss banking secrecy. But very little about how to verify the suitability of your customers.

Source: with Agencies

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