Lombard Odier & Cie has been found guilty and ordered to pay SFr3m ($3.7m) after Swiss judges concluded the bank failed to prevent an Uzbek money-laundering network from operating through its Geneva business.
The Swiss Federal Criminal Court also gave a former Lombard Odier relationship manager, identified only as C. under privacy rules, a two-year suspended prison term for his part in the case.
The proceedings have run for years and had already shifted in April, when the case against Uzbek businesswoman and former diplomat Gulnara Karimova, described as the alleged organiser, was thrown out.
Switzerland’s highest criminal court ended that case after ruling that Karimova’s detention in Uzbekistan meant she was unlikely to stand trial in Switzerland, making a fair hearing impossible.
Last year, prosecutors brought money-laundering charges against Lombard Odier, saying the bank lacked adequate safeguards and that this allowed the concealment of tainted funds linked to “The Office”, a structure allegedly created by Karimova.
The court upheld that accusation.
“The bank had evidence suggesting that part of the assets placed in the accounts managed by C. originated from acts of corruption,” the court said in its statement on the judgment.
According to Bloomberg, the judges also said the bank’s compliance function “did not take sufficient measures to ensure that further enquiries regarding the origin and economic purpose of these funds were conducted and duly documented”.
Under Swiss law, companies can face criminal liability if they do not do enough to stop money laundering.
In response, Lombard Odier released a statement, saying it “disagrees” with the ruling and plans to appeal.
“It should be noted that the Office of the Attorney General has never alleged that Lombard Odier knowingly or willfully participated in money laundering,” the bank said.
“As a reminder, the events under review date back more than fifteen years” and “the underlying case began after Lombard Odier proactively reported suspicions to the Swiss authorities in 2012,” it added.
According to prosecutors, C. had prior links to Karimova and other people involved in “The Office” before joining Lombard Odier, through work connected to an investment fund led by Karimova.
After arriving at the bank in 2008, he maintained those connections and opened nine accounts over the next four years that were meant to receive money generated by the scheme, the indictment said.
Prosecutors alleged that he used fabricated beneficial owners for the accounts and sought to present one shell company from “The Office” as though it were an independent operating business.