5 Swiss bankers convicted in Brazil money case

19 September 2008

BELLINZONA — Switzerland’s highest criminal court on Thursday convicted five Zurich bankers of helping a ring of corrupt Brazilian tax officials launder USD 45 million (CHF 50.6 million).

The Federal Criminal Tribunal sentenced the bankers to suspended prison terms of up to 16 months – sentences that would take effect if those convicted commit further crimes during that time. In addition, they were ordered to pay financial penalties of up to CHF 21,600 each.

The five have not been publicly identified because of Switzerland’s strict privacy laws, but they include the former director of the Zurich branch of the now-defunct Discount Bank & Trust Cie, the head of the bank’s South America business, its chief legal council and two other bank employees.

All five maintained they were innocent and said they would appeal to the Federal Tribunal, the country’s highest court.

The bankers were convicted of having kept accounts at the bank for Brazilian tax inspectors and high-ranking officials from Brazil who invested USD 45 million worth of cash allegedly obtained through criminal activities.

Court President Jean-Luc Bacher said the defendants should have realized by 2001 at the latest that the money coming from Brazil to Switzerland was of criminal origin and should have informed the director of the bank.

But, he said, they failed to act, hindering instead any measures possible through delaying tactics and cheated the bank’s control system.

The sentences were handed down under a 2007 law aimed at easing prison overcrowding in Switzerland. Some jail terms were shortened and a system of financial penalties was instituted to replace shorter prison sentences.

The trial in Switzerland is one of a series in the two countries involving Brazilian tax authorities who demanded bribes for helping companies and individuals evade millions of dollars in taxes by depositing money in Swiss banks.

In Brazil, 22 tax inspectors and ring leader Rodrigo Silveirinha were convicted and sentenced to prison terms ranging from two years and six months to 20 years and six months. In 2007, a higher court confirmed their imprisonment for money laundering and corruption.

Swiss officials, who have provided judicial assistance to Brazil in the case, began their own investigation in 2001 after Discount Bank & Trust was taken over by a Geneva-based bank, which reported a number of financial irregularities to authorities.

Switzerland, embarrassed in past years that its banking secrecy rules fostered a reputation of a safe haven for the funds of dictators and other corrupt foreign officials, has stepped up its fight against money laundering.

Reforms over the last two decades have made it harder to hide money in Switzerland, and the country has become a world leader in returning cash to cheated governments.

[AP / Expatica]