Office of the Federal Prosecutor
Bern, November 29, 2024 – At the end of its criminal investigation, the Federal prosecutor’s Office (BA) filed an indictment with the Federal Criminal Court on November 26, 2024 against the bank Lombard Odier & Cie SA and one of its former employees for serious money laundering. The bank and its former employee are suspected of playing a vital role in concealing proceeds from the activities of the “Office” founded by Gulnara Karimova, which the BA classifies as a criminal organization.
The indictment filed follows the facts that led the BA to indict gulnara karimova, the daughter of the former President of the Republic of Uzbekistan, and the second defendant at the Federal criminal Court on September 28, 2023. They are accused of being part of a criminal organization called “Office” which is active in different countries. Between 2005 and 2012, they are said to have laundered assets in Switzerland that came from crimes committed by this criminal organization, whose main commander is Gulnara Karimova, according to the indictment of the Federal Prosecutor’s Office (see the media release of September 28, ie 2023).
According to the indictment, the investigations in the current criminal proceedings confirmed the suspicion that part of the money laundered in Switzerland was transferred through banking relations at Banque Lombard Odier & Cie SA (hereinafter Lombard Odier) in Geneva. The bank and one of its former employees are said to have played a vital role in concealing proceeds from the criminal activities of the criminal organization “Office”. For this reason, the BA is conducting criminal proceedings against the bank and one of its former employees since December 2016 on suspicion of serious money laundering. The investigation phase was completed when the indictment was presented to the Federal Criminal Court. The former asset manager, who worked in Lombard Odier’s private client department between 2008 and 2012, is accused of serious money laundering under Article 305bis, paragraphs 1 and 2 of the Criminal Code (StGB). Lombard Odier bank is accused of serious money laundering under Article 305bis, paragraphs 1 and 2 of the Criminal Code, in conjunction with the company’s criminal liability under Article 102, paragraph 2 of the Criminal Code.
The alleged acts of the former bank employee
In particular, due to his role as a member of the investment committee of a fund run by Gulnara Karimova, the accused is said to have known these and several members of the “Office” before he was hired by Lombard Odier. After joining the bank in 2008, he is said to have kept in active contact with members of the “Office” and offered cooperation to some of them. according to the indictment, the accused is accused of opening or commissioning, in his capacity as an asset manager at Lombard Odier between August 2008 and August 2012, nine “Office” banking relationships intended to receive money from crimes committed by this criminal .organization. He is said to have afterward managed these banking relationships and failed to report within the bank that false beneficial owners were named to these accounts, even though he was said to have known that Gulnara Karimova was the true beneficial owner of the funds. In this context,it is indeed also said that the accused declared an “Office” company as an operating company,even though he is said to have known that he had no business activities or employees and that it was only established by the criminal organization.forward an objective to give legal cover to criminal proceeds. The accused is also accused of not having clarified the economic background of the credits and debits on the nine relevant banking relationships or of having clarified the economic background of the credits and debits incorrectly or late and not informing the Compliance Watch. it is indeed said that he breached the duty to report it immediately
According to the BA indictment, the accused is said to have known that the money transferred to the nine bank accounts mentioned came from the criminal activities of “Office”, in particular from acts of corruption in the Uzbek telecommunications sector.By his actions, it is indeed said that he obstructed the decision of the initiative, the finding and the confiscation of assets that he knew came from criminal offenses and that he was thus guilty of serious money laundering in accordance with Article 305bis, paragraph 1 and paragraph 2 thereof.the Criminal Code.
Accused acts of the bank
The BA accuses Lombard Odier of not complying with the anti-money laundering standards applicable at the time and its own internal guidelines when opening and managing the nine business relationships mentioned. In particular, the investigation found failures in the identification and renewal of the beneficial owner of the business relations in question, in the obligation to also clarify business relations involving increased risk, in the adoption and annual review of business relations with political exposure. people (PEP).
According to the indictment, from at least 2008 to 2012, there were numerous deficiencies in lombard Odier’s anti-money laundering program, so that the acts of money laundering allegedly committed by the employee responsible for nine relationships were repeated and continued banking “Office” it could not be prevented or detected. in this context, it is indeed said that the bank has not taken all necessary and reasonable organizational measures to prevent serious acts of money laundering within the bank. she is thus accused of serious money laundering within the meaning of Article 305bis, paragraphs 1 and 2 of the Criminal Code, in conjunction with the criminal liability of the company pursuant to Article 102, paragraph 2 of the Criminal Code.
The presumption of innocence will apply until the final verdict is reached. From now on,it is indeed solely the duty of the Federal criminal Court in Bellinzona to provide further data. In accordance with the applicable procedural regulations,the Federal Prosecutor’s Office will announce the criminal charges at the main hearing before the Federal Criminal Court.
The original media release is in French.
editor
Office of the Federal Prosecutor
What are the key components of an effective anti-money laundering program in banks?
Interview Between time.news Editor and Financial Crime Expert
editor: Good day, and welcome to this special edition of Time.news. Today, we have the privilege of speaking with Dr. Elena Vasiliev, an expert in financial crime and anti-money laundering (AML) regulations.Dr. Vasiliev, thank you for joining us.
Dr. Vasiliev: Thank you for having me. It’s grate to be hear.
Editor: Let’s dive right into the recent indictment involving Lombard Odier & Cie SA. The Federal Prosecutor’s Office of Switzerland has charged the bank and a former employee with serious money laundering. What are your initial thoughts on this case?
Dr. Vasiliev: It’s quite a notable development. The case highlights the ongoing battle against money laundering activities and the role financial institutions play in either facilitating or combating these crimes. The indictment suggests that Lombard Odier was allegedly complicit in laundering proceeds from the criminal organization linked to Gulnara Karimova. This underscores the necessity for banks to adhere strictly to AML regulations and conduct thorough due diligence on clients.
Editor: absolutely. The allegations indicate that between 2005 and 2012, considerable funds were laundered through the bank related to Karimova’s organization. Why is this time frame notably relevant?
Dr. Vasiliev: The period between 2005 and 2012 is crucial as it aligns with the height of operations for many complex financial schemes that frequently enough involve significant, illicitly obtained funds. Investigators tend to focus on past activities to build a comprehensive picture of how money was moved and concealed. it’s vital for tracing the origins of funds, understanding the mechanisms used in laundering, and ultimately holding responsible parties accountable.
Editor: The indictment also suggests the former employee maintained close ties with members of Karimova’s organization. How does this level of interaction complicate the investigation?
Dr. Vasiliev: It complicates things notably because it blurs the lines between personal and professional relationships. If the employee was involved in the criminal activities outside of their work, it raises questions about their intentions. Additionally, it could indicate potential collusion within the organization. Regulators and investigators will need to disentangle these relationships to ascertain whether the bank’s internal controls failed or if individuals acted with deliberate misconduct.
Editor: Speaking of internal controls, what measures should banks like Lombard Odier be implementing to prevent situations like this from occurring?
Dr. Vasiliev: Comprehensive AML programs are essential. This includes robust customer due diligence,ongoing transaction monitoring,and employee training on recognizing suspicious activities. banks should also have clear reporting mechanisms and foster a culture of compliance where employees feel empowered to speak out against unethical behavior. Regular audits and collaboration with regulatory authorities can also strengthen their defenses against money laundering.
Editor: Given the severity of the charges, what implications might this case have for Lombard Odier and the broader banking industry in Switzerland?
Dr.Vasiliev: This case could lead to significant reputational damage for Lombard Odier, perhaps affecting client trust and buisness relationships. For the wider industry,it serves as a warning. Banks must recognize that regulatory scrutiny is intensifying.If institutions fail to uphold stringent compliance standards, they risk legal consequences, financial penalties, and further regulations that could reshape how they operate.
Editor: It’s certainly a turning point for both the institution and the industry. Before we wrap up,what message do you think this indictment sends to those within the financial sector?
Dr. Vasiliev: The message is clear: financial institutions cannot afford to take AML compliance lightly. The legal frameworks are becoming increasingly robust, and the risks of non-compliance are high. Ultimately, investing in effective compliance measures is not just about avoiding penalties; it’s about maintaining the integrity of the financial system.
Editor: Wise words, Dr. Vasiliev. Thank you for sharing your insights on this critical issue. We appreciate your time and expertise.
Dr. Vasiliev: Thank you for having me. It’s imperative we keep discussing these issues to promote a more transparent financial landscape.
Editor: And thank you, dear viewers, for tuning in to this timely discussion. Stay informed and engaged. Until next time!