By PAUL O’DONOGHUE, Senior Correspondent
PRIVATE bank Edmond de Rothschild Europe has become the first banking institution ever to be convicted of money laundering in Luxembourg.
As part of the decision, the firm will pay €25 million to settle criminal charges related to Malaysia’s 1MDB sovereign wealth fund.
The €25 million penalty was already agreed between prosecutors and Edmond de Rothschild Europe last month. However, it has now been formally approved by the court.
“This is the first time that a Luxembourg banking institution has been convicted of money laundering,” the court stated.
“The confiscated funds are allocated to the Luxembourg State. The Court thus considered that the guilt of the prosecuted is established and that the penalties set out in the agreement are legal and adequate.”
In a statement, the bank said: “Edmond de Rothschild Europe takes note of the decision issued by the District Court of and in Luxembourg in connection with the criminal proceedings related to the 1MDB case, which stems from events that occurred around fifteen years ago”.
“Edmond de Rothschild Europe recalls that these historical events led to the implementation of a comprehensive remediation plan, launched in 2016 and completed in 2019. The employees involved are no longer part of the organisation,” it said.
1MDB
Between 2009 and 2013, international investigators believe at least $4.5 billion (about €3.3 billion at the time) was misappropriated from 1MDB, a Malaysian sovereign wealth fund . Around $472.5 million (€433.7 million) later ended up at Edmond de Rothschild Europe, a private bank based in Luxembourg.
Prosecutors accused the bank of failing to check where those funds came from. In May last year, an investigating magistrate completed the inquiry and described it as a “particularly complex case.”
This deal covers only the bank’s criminal liability. Prosecutors are still pursuing charges against four individuals involved in the case.
In 2017, Luxembourg’s financial regulator, the CSSF, fined the bank nearly €9 million for procedural failings related to the 1MDB case.
The case is one of several taken in multiple countries related to the 1MDB controversy in an effort to recover funds.
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