Swiss Bank Execs Suspected in Money-Laundering Probe

The investigation concerns four managers at Julius Baer, the Financial Market Supervisory Authority (FINMA) said in a statement Thursday.

Officials have launched “enforcement proceedings” against one executive for “serious violations of... anti-money laundering provisions” at the private lender, but declined to specify in their release as to what this will entail.

Another employee has avoided such action by agreeing to never again work in a managerial capacity at the bank, while the remaining two suspects have received written reprimands.

FINMA noted that the action comes “in the context of the alleged corruption cases involving the Venezuelan oil group PDVSA.”

As part of a probe that began in 2019, the agency has contacted more than 30 national lenders regarding their role in the alleged activity and to verify their compliance with financial supervisory laws.

The Swiss press recently reported that the Public Prosecutor’s Office in Zurich and local police had identified payments of nearly US$10 billion from Venezuela to Switzerland, money of allegedly criminal origin distributed across several hundred different accounts.

Last year, FINMA said it had identified severe shortcomings in Julius Baer's anti-money laundering measures during the period between 2009 and early 2018, after investigating alleged corruption cases surrounding PDVSA and the International Football Association (FIFA). The regulator also called out breaches of reporting obligations and failures in risk management.

These deficiencies were reportedly most apparent in respect of “know-your-customer” background checks on clients, which were allegedly often incomplete or unclear.

One example cited by the regulator included a CHF70 million (US$79 million) transaction processed in 2014 on behalf of a Venezuelan client, against which the bank had allegedly failed to conduct any due diligence checks, despite having been aware the individual in question was facing serious allegations of corruption at home.

Nor is it the only time that Julius Baer has come under scrutiny for allegedly processing international transfers of suspected illicit cash.

The private lender was recently implicated in the FinCen Files, an investigative project conducted by OCCRP in partnership with several other agencies around the world that used documents leaked from the U.S. Treasury to uncover suspicious transactions at multiple global financial institutions.