More than half a dozen senior Credit Suisse managers, as well as its legal department, were aware that a group of clients were potentially violent drug-smuggling criminals, but approved millions of euros in transactions for them before freezing their accounts, a court has heard.
Details of the bank’s dealings with a group of Bulgarian mafiosi emerged in Switzerland’s Federal Criminal Court on Thursday, where Credit Suisse is battling to clear its name in a landmark case against the bank brought by Swiss federal prosecutors.
The trial is the first instance of a Swiss bank being charged with criminal offences in the country’s history.
Credit Suisse has pledged to “vigorously defend” itself and insists it did not act to block its former clients’ funds because prosecutors did not order it to do so, despite its efforts to keep them appraised. The case relates to events between 2004 and 2008.
Two days of testimony from a co-defendant alongside the bank in the case — a former Credit Suisse relationship manager known as “E” whose identity is protected by Swiss law — has nevertheless painted a picture of an organisation in which little attention was paid to concerns over client criminality.
E told the court on Thursday that she had regularly briefed the bank’s senior management on the activities of her Bulgarian clients, after Swiss authorities first contacted the bank in June 2007 and ordered it to preserve all records of their financial affairs due to a criminal investigation.
At the end of August, the prosecutor ordered the bank to freeze all the accounts — but by that stage, the Bulgarian group had already, in less than three months, drained €9.25mn from Credit Suisse.
There was no internal impetus to investigate the clients independently or refuse their requests in the absence of a clear legal compulsion from the prosecutor to do so, E said. “Each and every transaction . . . was approved by the [bank’s] hierarchy,” she told the court.
Management, she said, were unruffled by the prospect of handling criminal funds.
“Such things inevitably happen in our business, more likely than not especially when you are successful,” E’s line manager told her in a 2007 email.
For two years before the Swiss prosecutor’s intervention, the court heard, Credit Suisse executives had been aware of serious concerns about the group of Bulgarian clients, who began depositing suitcases of cash in Zurich having driven them overland across the Balkans from Sofia starting in 2004.
In 2005, one of the account holders in the group was assassinated. But after what was referred to in one email as a “thorough due diligence” process, Credit Suisse decided to continue its relationship with others in his circle, the court was told.
The due diligence process in question, documents shown to the court revealed, consisted of a search on Factiva — a widely used subscription database of newspaper cuttings.
Press reports that the individual was a cocaine trafficker were dismissed by Credit Suisse management because they had appeared in “communist newspapers”.
The assassinated individual was the business partner of Evelin Banev, a former professional wrestler who was convicted of drug and money-laundering offences in Italy and Bulgaria in 2017 and 2019.
Even after a second assassination, the bank did not feel compelled to question its Bulgarian clients’ activities further.
The court also heard from E that even after Swiss authorities had issued freezing orders against the accounts of five individuals, including Banev, Credit Suisse withheld information about a further Sfr7m it held — all of which was subsequently withdrawn — in the accounts of their spouses and close associates.
The trial is due to continue in the southern Swiss city of Bellinzona for the next three weeks.