Falcon first bank to face money laundering trial in Switzerland
Falcon Private Bank, which has ceased operations, is accused of helping one of its former directors to embezzle $3.8 million (CHF3.5 million) from Malaysia’s sovereign wealth fund 1MDB.
The bank’s ex-CEO, Eduardo
Leeman, also faces related charges at the Federal Criminal Court in a case that
started on Monday. Both parties deny the charges.
The Swiss authorities have come down hard on banks involved in the 1MDB scandal. Abu Dhabi-owned Falcon Private Bank was ordered to hand over CHF2.5 million in illegally obtained profits in 2016 and subsequently decided to stop operating in Switzerland.
The same year, BSI Bank was forced to
sell its business and shutter its doors under pressure from the financial
regulator. Other banks were reprimanded by the financial regulator in relation
to 1MDB.
Swiss prosecutors followed up by filing criminal charges
against Falcon, leading to the current trial in Bellinzona, southern
Switzerland. It is the first time that a bank has been brought to trial for
alleged money laundering on Swiss soil.
Clear signal
Five years ago the head of the Swiss Financial Market
Supervisory Authority (FINMA) complained that fines alone were not having the
desired effect of preventing money laundering.
The Falcon trial is one clear signal that the Swiss
authorities are stepping up action against miscreant banks.
In a case unrelated to Falcon or the 1MDB scandal,
prosecutors filed charges against Credit SuisseExternal link bank last year for
alleged failures to prevent money laundering.
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