Credit Suisse was scrambling on Sunday to contain the fallout from its latest scandal after several newspapers reported that more than 18,000 leaked accounts showed that criminals, alleged human rights abusers and sanctioned individuals, including dictators, had been clients of the Swiss bank.
The leaked information, which covered accounts holding more than $100 billion, came from a whistle-blower who shared his findings with German newspaper Suddeutsche Zeitung, according to a press release. The newspaper then involved an anti-corruption group and 46 other media outlets around the world, including The New York Times, Guardian, Le Monde and others.
The whistle-blower said in a statement to the media consortium that Swiss bank-secrecy laws were “immoral.”
“The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders,” the whistle-blower said.
Clients of the second-biggest Swiss bank included an international cast of unsavory characters, according to the media reports. Account holders included a Yemeni spy chief implicated in torture, Venezuelan officials involved in a corruption scandal, King Abdullah II of Jordan and two sons of former Egyptian dictator Hosni Mubarak.
According to The New York Times, other account holders included sons of a Pakistani intelligence chief who helped funnel billions of dollars from the United States and other countries to the mujahedeen in Afghanistan in the 1980s.
Included in the leak are details linked to more than 30,000 account holders which held in excess of $100 billion at their prime in one of the world’s biggest private banks, Credit Suisse. This is not complete data of the bank which has 1.5 million private banking clients. Named as Suisse Secrets, this is the only known leak of a major Swiss bank’s client data to journalists.
Many Pakistanis have also been found in the data. To be more precise, around 1,400 individuals domiciled in Pakistan are linked with around 600 accounts opened in Credit Suisse.
The accounts had been opened from the 1940s into the 2010s, according to the Sunday release from the Organised Crime and Corruption Reporting Project. More than two-thirds were opened from year 2000 onward.
“I’ve too often seen criminals and corrupt politicians who can afford to keep on doing business as usual, no matter what the circumstances, because they have the certainty that their ill-gotten gains will be kept safe,” Paul Radu, co-founder of the OCCRP, said in the statement. “Our investigation exposes how these people can bypass regulation despite their crimes, to the detriment of democracies and people all over the world.”
While Swiss banks, world-renowned for the country’s strict secrecy laws protecting clients, aren’t supposed to accept money linked to criminal activity, the law is mostly unenforced, according to The New York Times, which cited a former head of Switzerland’s anti-money laundering agency.
Credit Suisse said in a nearly 400-word statement on Sunday that it “strongly rejects” the accusations made about its business practices.
“The matters presented are predominantly historical, in some cases dating back as far as the 1940s, and the accounts of these matters are based on partial, inaccurate, or selective information taken out of context, resulting in tendentious interpretations of the bank’s business conduct,” the bank said.
About 90 percent of the accounts in the leak had been closed or were in the process of being closed before media inquiries began, the bank said. It is “comfortable” that the remaining accounts were vetted properly. Credit Suisse added that it couldn’t comment on individual clients and that it’s already taken action “at the relevant times” to address improper clients.
For much of the past decade, the Zurich-based financial giant has moved from one crisis to another as it came to terms with its role in helping clients launder ill-gotten funds, shelter assets from taxation and aid in corruption.
The firm had to replace both its CEO and chairman within the past two years and was ensnared in the collapse of the supply chain finance firm Greensill as well as the US hedge fund Archegos.
“The pretext of protecting financial privacy is merely a fig leaf covering the shameful role of Swiss banks as collaborators of tax evaders,” said the Credit Suisse whistleblower, according to the OCCRP statement. “This situation enables corruption and starves developing countries of much-needed tax revenue.”
OTHER SCANDALS: The leak follows the so-called Panama Papers in 2016, the Paradise Papers in 2017 and the Pandora Papers last year. They all shed light on the secretive workings of banks, law firms and offshore financial-services providers that allow wealthy people and institutions — including those accused of crimes — to move huge sums of money, largely outside the purview of tax collectors or law enforcement.
The new disclosures are likely to intensify legal and political scrutiny of the Swiss banking industry and, in particular, Credit Suisse. The bank is already reeling from the abrupt ousters of its two top executives.
With its ironclad bank-secrecy laws, Switzerland has long been a haven for people who are looking to hide money. In the past decade, that has made the country’s largest banks — especially its two giants, Credit Suisse and UBS — a target for the authorities in the United States and elsewhere who are trying to crack down on tax evasion, money laundering and other crimes.
In 2014, Credit Suisse pleaded guilty to conspiring to help Americans file false tax returns and agreed to pay fines, penalties and restitution totaling $2.6 billion.
Three years later, the bank paid the Justice Department $5.3 billion to settle allegations about its marketing of mortgage-backed securities. Last fall, it agreed to pay $475 nillion to US and British authorities to resolve an investigation into a kickback and bribery scheme in Mozambique. And this month, a trial got underway in Switzerland in which Credit Suisse is accused of allowing drug traffickers to launder millions of euros through the bank.
The Justice Department and the Senate Finance Committee are also looking into whether US citizens continue to hold undeclared accounts at the bank.
Several former Credit Suisse employees told federal prosecutors late last year that the bank continued to hide hundreds of millions of dollars for clients long after its 2014 guilty plea, according to a whistle-blower lawsuit filed last year by a former bank official and a lawyer for other former employees. (The suit was dismissed after the Justice Department said it “threatens to interfere with ongoing discussions with Credit Suisse” about dealing with Swiss bank accounts held by US citizens.)
The media consortium has nicknamed the latest leak “Suisse Secrets.” Of the more than 18,000 bank accounts involved, roughly 100 US citizens held accounts, but none are public figures.
Among the biggest revelations is that Credit Suisse continued to do business with customers even after bank officials flagged suspicious activity involving their finances.
One account holder was Venezuela’s former vice minister of energy, Nervis Villalobos.
Employees in Credit Suisse’s compliance department had reason to be wary of doing business with him. The bank had a 2008 report by an outside due-diligence firm detailing corruption allegations involving Mr. Villalobos and Venezuela’s state-owned oil company, Petróleos de Venezuela, according to a Spanish police report obtained by the media consortium. (The Times reviewed the report.)
Credit Suisse nonetheless opened an account for him in 2011, the leaked bank data shows. The account, which was closed in 2013, held as much as $10 million.
Lawyers for Villalobos, who was criminally charged by the Justice Department in 2017, didn’t respond to requests for comment.All told, there were 25 Credit Suisse accounts, containing a total of about $270 million, that belonged to people accused of being involved in a wide-ranging conspiracy surrounding Venezuela’s oil company. The accounts remained open after the scandal started to become public, but were closed by the time criminal charges were filed.
The bank also kept accounts open for a Zimbabwean businessman who was sanctioned by US and European authorities for his ties to the government of the country’s longtime president, Robert Mugabe. The accounts stayed open for several months after the sanctions were imposed.
The leaked bank information included many accounts linked to government officials across the Middle East and beyond. The data raises questions about how public officials and their relatives accumulated vast fortunes in a region rife with corruption.
The sons of former President Hosni Mubarak of Egypt, Alaa and Gamal Mubarak, held a total of six accounts at various points, including one in 2003 that was worth $196 million.
In a statement to The New York Times, the Mubaraks’ lawyers declined to comment about specific accounts but said the suggestion that any of the Mubaraks’ assets had been “tainted by any illegality or a result of any favoritism or use of influence” would be “both unfounded and defamatory.”
Any assets they held, the statement said, were from their “successful professional business activities.”
In 2003, the year that the United States invaded Iraq to topple Saddam Hussein, Saad Kheir, the head of Jordan’s intelligence agency, opened an account that would eventually hold $21.6 million.
The account was closed after Mr. Kheir’s death in 2009.
The family of Mr. Mubarak’s long-serving and brutal spymaster, Omar Suleiman, had an account, too. Mr. Suleiman died in 2012. Efforts by the reporting project to reach his family were unsuccessful.