Last week, Switzerland’s top criminal court delivered a landmark verdict in the country’s first criminal trial against a major lender. The bank was found guilty of having failed to prevent money laundering, allowing an international drug trafficking network to move more than 19 million Swiss francs through its accounts [i]
The case has garnered considerable attention in Switzerland, perceived as heralding a toughened stance on financial institutions found to be deficient in their compliance regimes.
Indeed, there may soon be another criminal prosecution waiting on the docket [ii] – and Swiss courts may not be the only ones witnessing the shift.
Recent years have seen the advent of several high-profile criminal prosecutions against banks across Europe, prompting speculation as to whether regulators will increasingly seek to flex their proverbial, prosecutorial muscle.
Over the past decades, the banking sector (and other obliged entities) has become accustomed to ever-increasing administrative fines for technical non-compliance.
This includes, for example, KYC shortcomings; incomplete sanction screenings; and/or inadequate risk scoring, to name but a few.
Seven-figure fines certainly reflect the seriousness with which regulators view such breaches and can damage both revenues and reputations – but where evidence of actual money laundering is lacking, notions of resulting societal harm may remain hypothetical.
Conversely, recent criminal investigations have revealed instances where AML risks have in fact crystallised because of weakened organisational controls.
In such cases, the link to actual abuse of client accounts as vehicles for money laundering is tangible – and the institutions involved have received criminal convictions, fines, or both.
In the table below, we summarise several recent criminal cases against banks in Europe. Whether they settled or made it to court, each of the cases involved transactions bearing the hallmarks of money laundering and other financial crime, which authorities said should have been identified and swiftly reported.
While this is just a small selection of cases, with differing facts and circumstances, they serve as a reminder to financial institutions to be alert to the very real crime threats, they face, and to recognise risk indicators when they arise.
| Where & When | Fine | Crime threat | Risk indicators |
| Switzerland[i] June 2022 | CHF 2 million Additional CHF 19 million to be paid as compensation for assets which could not be confiscated due to bank’s internal deficiencies | Laundering of money related to drug smuggling | Evidence of smurfing, cash deposits just under reporting thresholds Large sums of cash accumulated over time, deposited in safety deposit boxes Significant amounts of cash deposited into client account Industries involved: construction, leasing, hotels |
| UK[ii] Dec. 2021 | £ 265 million | Money laundering | Multi-million-pound cash deposits despite client declaring upon account opening that there would be no cash handling Daily cash deposits rapidly increased, exceeding £ 365 million over 4-year period -Business activity inconsistent with what could reasonably be expected for the client’s profile Industries involved: jewellery store |
| France[iii] May 2021 | No verdict yet | Money laundering related to corruption and embezzlement -Misappropriation of public funds | Failure to report suspicious transactions linked to a PEP Large number of cash deposits made by PEPs Large investments in real estate |
| Netherlands[iv] April 2021 | € 480 million | Money laundering related to organised drug trafficking | Acceptance of cash deposits including €500 notes Private client a known fraudster Private client’s acquisition of shell companies with existing corporate accounts at same bank Company’s transactions did not fit its registered business activities Client provided insufficient information to explain transactions Bank accounts remained active after dissolution of companies |
| Corruption | Corporate client the subject of adverse media alleging involvement in high-profile international corruption | ||
| Fraud | Customer had a known gambling addiction Rapid increase in activity, where consistently overdrawn account suddenly received over 4.3 million in 9-month period Transactions inconsistent with client’s usual profile |
Each of the cases above revealed a constellation of risk indicators, the identification of which was critical to compliance.
As was highlighted by the Court on one occasion, while the bank in question “was in no way complicit in the money laundering which took place, the Bank was functionally vital.
Without the Bank – and without the Bank’s failures – the money could not be effectively laundered.”[i]
We at Acuminor are of course cognizant of the difficulties organisations face in wrangling disparate and ever-evolving information regarding financial crime (indeed, a reality which serves as our raison d’être!).
There can be no doubt, however, that an appreciation of the threat landscape and associated risk indicators is essential for regulated entities seeking to protect themselves and society from financial crime.
Original document available HERE:
[1] SWI swissinfo.ch . (2022, June 16). Swiss Prosecutor Sees Millions Laundered Via Credit Suisse. Swiss Broadcasting Corporation.
[i] R v National Westminster Bank PLC, Southwark Crown Court,Sentencing Remarks of Mrs Justice Cockerill, 13 December 2021. https://www.judiciary.uk/judgments/r-v-national-westminster-bank/
See also R v National Westminster Bank PLC, Agreed Statement of Facts.
[1] Federal Criminal Court of Switzerland, (2022) Cause Ministère public de la Confédération contre Credit Suisse AG et autres prévenus (SK.2020.62), 27 June 2022, Communiqués aux medias (bstger.ch)
[1] Ibid.
[1] R v National Westminster Bank PLC, Southwark Crown Court,Sentencing Remarks of Mrs Justice Cockerill, 13 December 2021. https://www.judiciary.uk/judgments/r-v-national-westminster-bank/
See also R v National Westminster Bank PLC, Agreed Statement of Facts.
[1] Sebag, G. (20 May 2021) BNP charged for ill-gotten assets linked to Gabon, Bloomberg, BNP Charged for Laundering Ill-Gotten Assets Linked to Gabon – Bloomberg
[1] NPPS. (2021, April 19). Statement of Facts and Conclusions of the Netherlands Public Prosecution Service. National Office for Serious Fraud, Environmental Crime and Asset Confiscation and National Office. https://assets.ctfassets.net/1u811bvgvthc/4eUXF7eCnLthKp95RNnMnz/645730a7cd044da33ef4ad1545470f12/Statement_of_Facts_-_ABN_AMRO_Guardian.pdf
[1] R v National Westminster Bank PLC, Southwark Crown Court,Sentencing Remarks of Mrs Justice Cockerill, 13 December 2021. https://www.judiciary.uk/judgments/r-v-national-westminster-bank/
See also R v National Westminster Bank PLC, Agreed Statement of Facts.
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