Credit Suisse along with a former manager of the bank have been indicted by the Office of the Attorney General of Switzerland (OAG) for money laundering linked to a Bulgarian cocaine trafficking ring.
The misconduct concerned top-level wrestlers who following the end of communism in Bulgaria turned to mafia clans for income.
Go deeper with GlobalData
The case covers a Bulgarian wrestler who allegedly resorted to drug trafficking, the Bulgarian’s associates, an ex-employee of the bank, an executive of the bank and Credit Suisse itself.
The charge against the former bank employee was recently dismissed.
The Bulgarian wrestler was a client of Credit Suisse and laundered profits from the trafficking ring with support from a former employee at the bank.
Credit Suisse has been accused of failing to screen higher risk transactions properly, and not adhering to the anti-money-laundering provisions in force.
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By GlobalDataAs a result, it failed to prevent the flight of assets worth nearly CHF35m associated with the Bulgarian criminal organisation, noted OAG.
OAG said: “Credit Suisse had been aware of these deficiencies from at least 2004. The fact that the bank let it continue until 2008, or even beyond, impeded or frustrated the detection of the money laundering activities carried out by the criminal organisation with the aid of the bank executive.”
In response, the bank said: “Credit Suisse unreservedly rejects as meritless all allegations raised against it and is convinced that its former employee is innocent.”
The bank said that it will defend itself against these “unfounded” charges and that the Swiss Federal Criminal Court can fine up to CHF5m ($5.7m) in the case.
It also said that the bank’s anti-money laundering controls have been enhanced over the last 12 or more years.
Other legal issues
The move by OAG adds to the woes of Credit Suisse, which has already been in the midst of several legal tussles, most recently for a spying scandal that erupted last year.
The scandal involved the surveillance of its former wealth management head Iqbal Khan in the wake of his defection to rival UBS.
An internal probe failed to unveil any evidence of Khan trying to poach Credit Suisse employees or clients to UBS, which was said to be the reason behind his surveillance.
Finma has launched enforcement proceedings against the bank for the scandal.
Recently, a report revealed that the bank has been carrying out physical surveillance of more employees than formerly revealed.
Last month, the bank was fined in Hong Kong for failing to prevent electronic trading anomalies.
In 2018, the bank was fined for corrupt hiring practices in Asia.
