Lombard Odier indicted in Switzerland for money laundering
2024.11.29 08:50
By Dave Graham and Oliver Hirt
ZURICH (Reuters) -Swiss prosecutors on Friday indicted private bank Lombard Odier and one of the firm’s former employees for “aggravated money laundering”, in a rare charge of such magnitude against one of Switzerland’s biggest and oldest wealth managers.
The bank and the ex-employee are suspected of having played a decisive role in enabling the concealment of the proceeds of a criminal enterprise set up by Gulnara Karimova, daughter of the late president of Uzbekistan, Islam Karimov, the Swiss Attorney General’s Office (OAG) said in a statement.
Lombard Odier denied wrongdoing and said the investigation in question began after it had itself reported its suspicions to Swiss authorities in 2012.
“The allegations are unfounded and without merit and are firmly rejected by the bank,” it said in a statement, adding that it had fully cooperated with authorities throughout.
Lombard Odier, which dates back to 1796, reported total client assets of 296 billion Swiss francs ($336 billion) at the end of last year.
Karimova, who was indicted by the Swiss OAG last year over alleged participation in a criminal organisation at the centre of the case, could not immediately be reached for comment.
She has previously denied those allegations.
Banking secrecy was once the cornerstone of Switzerland’s prowess in wealth management, but that stronghold has been gradually eroded under international pressure, making it harder for people to use the country to hide their wealth.
The OAG alleged Lombard Odier failed to comply with anti-money laundering standards and its own internal guidelines in opening and managing nine bank accounts under suspicion.
Prosecutors filed the charges against Lombard Odier just a few days after Credit Suisse, which is now a part of UBS, was acquitted of failing to prevent money laundering by a Bulgarian cocaine trafficking gang, overturning a 2022 conviction.
Dominik Gross, an economic historian at Swiss NGO Alliance Sud, said the indictment was the latest in a growing series of setbacks for the country’s financial sector, even if it alone looked unlikely to do serious damage to Lombard Odier.
“A private bank is less exposed to the markets than was the case with Credit Suisse,” he said, noting how scandals gradually sapped confidence in Credit Suisse, which collapsed in 2023.
Swiss prosecutors said Karimova and another person are suspected of participating in a criminal organisation known as “The Office”, which operated in several countries, and of laundering proceeds in Switzerland, between 2005 and 2012.
Karimova is currently in prison in Uzbekistan, after being jailed in 2019 for violating the terms of her house arrest and receiving a sentence in 2015 on charges of embezzlement and extortion. She was handed a further sentence in 2020.
Investigations have led the OAG to believe that part of the money laundered in Switzerland may have been transferred using bank accounts at Lombard Odier in Geneva, the OAG said.
The former employee of the bank worked in Lombard Odier’s private clients’ department between 2008 and 2012, and is suspected of having opened or arranged for the opening of the nine bank accounts, it added.
($1 = 0.8808 Swiss francs)
