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Ex-Credit Suisse bankers arrested on US charges over $2bn fraud scheme

04/01/2019

Three former bankers of the second-largest bank in Switzerland, Credit Suisse Group AG, were arrested in London over an alleged connection to a $2bn Mozambique fraud scheme, according to US justice authorities cited by media.The three suspects – former managing directors Andrew Pears and Surjan Singh, as well as the vice president in the global financing unit, Detelina Subeva – were charged with conspiring to violate US anti-bribery law, money laundering, and securities fraud in an indictment issued in a federal court in Brooklyn, New York.The three men were released on bail after their arrest in the British capital on Thursday but may face extradition to the US.

The bank itself was spared of the charges and says it was kept in the dark by its own staff.

“The indictment alleges that the former employees worked to defeat the bank’s internal controls, acted out of a motive of personal profit, and sought to hide these activities from the bank,” Credit Suisse said in a statement.

The arrests of the three former Credit Suisse employees came less than a week after the former finance minister of Mozambique was arrested in South Africa as part of the same case. Manuel Chang is now fighting extradition to the US. A fifth suspect was also arrested earlier this week.

Between 2013 and 2016, Credit Suisse and other banks arranged $2 billion loans for Mozambique state-owned companies. The loans were initially aimed at maritime projects and coastline protection in one of the poorest countries in the world, but instead were plundered, with at least $200 million diverted for bribes and kickbacks. The companies created to operate planned maritime projects were a cover for the suspects to enrich themselves.

The loans were partly concealed from international donors and creditors, including the International Monetary Fund. After they were disclosed in 2016, international aid was withdrawn, sending the nation into crisis. The state-owned companies missed more than $700 million in loan payments after defaulting in 2016 and 2017, according to the indictment.

A similar case has recently been brought against Wall Street giant Goldman Sachs. In December, Malaysia filed criminal charges against the US bank and two of its key bankers over its role in the multi-billion dollar scandal with 1MDB state fund. Kuala Lumpur wants $7.5 billion in reparations from Goldman Sachs, which it claims covered up the looting of the fund.
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Monday, September 17, 2018 – Credit Suisse lambasted by financial watchdog over FIFA money laundering

Switzerland’s financial supervisor FINMA says one of the country’s largest banks, Credit Suisse, failed to properly oversee its anti-money laundering procedures for FIFA, as well as Brazil’s and Venezuela’s state oil companies. According to the regulator, the banking multinational showed serious “deficiencies” in its attempts to counter illegal financial activities when dealing with soccer’s ruling body FIFA, Brazilian oil corporation Petrobras, and Venezuela’s state energy company PDVSA.
Saturday, April 1, 2017 – Is the Global Taxman Coming?

Credit Suisse is once again under international investigation for allegedly helping its clients evade the prying eyes of national tax authorities. This comes after the bank was fined $2.6 billion by the U.S. government in 2014 for helping Americans evade taxes. Helping high net worth private clients and corporations evade taxes, and then getting caught is not unique to Credit Suisse. Fellow Swiss megabank UBS and UK giant HSBC were fined hundreds of millions of dollars for their troubles.
Monday, December 26, 2016 – European Banks Settling Mortgage Securities Fraud Cases

Both German Deutsche Bank and Swiss Credit Suisse are settling charges with the United States government over their involvement in fraud in the mortgage market, which led to the 2008 financial crisis. The U.S.-based banking firms have collectively already paid over $100 billion for their criminal activities related to the financial crisis. The European banks have dragged out negotiations to the end of the Obama Administration in what appears to be a conscious strategy to get the best deal.


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